MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 659.03

+1.0%

Nov 21 4:00 PM EST

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To: Crimson Ghost who wrote (63287)	11/28/2000 6:29:22 PM
From: jmootx	Read Replies (1) of 99985

In the 1920's the fed also targeted the stock market just like today. Greenspan decided to call the stock market 'the wealth effect' but same target nonetheless. The May 50 basis point hike will likely prove to be the straw too big for the economy like the 100 basis point hike proved in August 1929. The Fed was fighting inflation instead of deflation in both scenarios. Our dollar has been way too strong, trade deficit too high. Stock compensation redemptions is a hard run on the market now. In terms of supply/demand the unregulated printing of executive and employee options turned to redemption is way too heavy for this market. This is as bad as margin in the 1920's in terms of damage to stocks. It may take longer to see similar damage, but same top heavy pressure on stocks. Again bad job by the Fed. Nasdaq 1800-2000 by May 2001.

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