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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: pater tenebrarum who wrote (19983)9/20/2000 1:23:03 PM
From: Les H  Read Replies (2) of 436258
 
Trimtabs on Monday

We Stay Short Term Bullish For Maybe One to Two Weeks, Then Bearish. .

Liquidity has been bullish the past two weeks, yet the stock market is down. Either we are missing some important outflow or portfolio managers are building cash levels.

Into October, the surging new offering calendar combined with lots of cash flowing back to Europe could end up as the worst of all possible liquidity scenarios. That would be a growing float combined with shrinking cash.

Betweeen May and August, foreigners -- mainly Europeans -- have poured over $130 billion into the US stock market. Without that new cash, the US stock market would be lots lower today. About $90 billion of that helped shrink the float when foreign companies announced they were buying US public ones. Another $40 billion or even more, was via direct investment in US stocks.

Add a slumping growth rate of new investment cash and Euro-land's need to pay $106 billion in taxes with $50 billion coming from the European and US equity markets, that says there could be less cash around.

At the end of 1999 margin debt provided the new cash to keep the market from crashing. Starting in May 2000, foreign cash kept the US stock market from crashing. Is there another new source we do not know that will perform the same magic trick this time?
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