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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Stoctrash who wrote (2955)	1/10/2001 11:19:33 AM
From: Chip McVickar	Read Replies (1) of 3536

Hi Fred, >>Why do I feel Rates will remain High....?<< Other then what I've already said I can add the following. As you know I do a lot of work with charts...! 1] Daily TYX chart has a double bottom April-Sept 56'00 Also a falling wedge from the Jan 2000 peak. 2] Weekly TYX has a Reversal bar last week around 54'00 Pitchfork median line is at 60'00 3] Monthly TYX have median lines at 65'00 Also, 54'00± is very close to a .618 for the month chart 4] '93-2001 chart has a pitchfork looking at 75'50 using '93 low as the handle -- '94 high and '98 low 5] I would be wrong in the short term if the double bottom at 56'00 is broken, but these are forward looking a couple of years. I expect short term rates to continue down to mitigate the Feds tightening and long term rates to remain high. But look.., I'm not an expert, just developing scenarios. I build about 3-4 separate scenarios each year starting in Sept. One is based on aggressive cutting by the Fed to add liquidity to the system in the event that becomes necessary. Any new liquidity will find its way into the markets. Not unlikely, if the economy weakens dramatically rather then just slowing down. Second is very positive and calls for a significant rebound to the Nasdaq as the buyers return to techs on the footsteps of the Bush administrations policies. Except for the Nasdaq, the markets have not moved very far in the last 6 months..., even with all the volatility. This suggests pressure is building to create a substantial move up. Walker Market Letter "The sentiment is polarized between two camps...the bears that sold out of the market quite a while ago and expect the market to keep going down, and the bulls that are still in the market and are convinced that the current levels are a screaming bargain and the market is about to rally. This leaves us with a bunch of bears who are not about to buy, and a bunch of bulls who are already invested and have no funds to buy with. Of course, this is a gross simplification, but I think it is accurate to a large degree." The markets are in a down trend and for these first two scenarios to become active the charts have to show and sustain a trend reversal on the weekly charts. And a third Scenario which I find the most compleling has ben expressed already. In answer to the same question you've asked, here's another post and further discussion. Message 15149374

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