Piffer OT - And Other Assorted Nuts Message Board

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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts

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To: Alan Smithee who wrote (31817)	5/7/2000 12:12:00 AM
From: Gary Walker	Read Replies (1) of 63513

Marty Zweig has been a leading fed watcher..... I have an old book called "You can profit from a Monetary Crisis." It was great back in the 70's. Author predicted the rise in gold from $35 to 900 per ounce. Point is that times change, books and theories go out of style. I used to subscribe to his Zweig's "Investor Letter." At one time he managed a mutual fund based on his trading theories. The "Letter" and hotline got better reviews than his mutual fund that practiced what he preached. The fund never did very well when I watched it. The problem with applying Marty's analysis is that the world has changed. The amount of money flowing into and out of the markets really dampens Marty's indicators. The economy is more global and has allowed rapid growth with minimal inflation in the US and in many foreign countries. At one time, a fed move to raise rates who have killed the bull. Today is a different story. Just look at last Friday's report. The pros bet that the market would be taken down. Didn't happen, instead we got a rally. 401k money is a huge factor. There's lots of money in mutual funds looking for a home. That's pumping up the bubble. Historically, it's taken months for higher rates to impact the economy and eventually the stock market. Eventually, investors will be lured from the Stock market to "safer" and higher yields in the money market or CD's. The fed is in a tough spot right now, IMO. The markets continue to foster the "wealth effect" mentality of the fed. The herd has yet to crack under all the interest rate increase pressure. I think it will take much longer for this market to crack under the weight of higher rates. In the mean time we'll see the massive fluctuations. A traders market is intact. Personally, I'll go on record and say that the March highs at the NASDQ and the NYSE won't be seen for at least 18 months. The fed knows that there is too much speculation in the markets. The March valuations were ridiculous. The problem facing the fed is the construction of a "soft landing." Greenspan is the master, so it's tough to bet against him and all that 401k money. Just my 2 cents. gw

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