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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 679.68+0.7%Nov 26 4:00 PM EST
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To: Boplicity who wrote (67353)1/20/2001 6:56:12 PM
From: Square_Dealings  Read Replies (1) of 99985
 
"You don't fight the FED."

I'm not shorting anything now, but just because Al Greenspan lowered rates 50 bpts doesn't mean I'm going long either. Its a little bit like saying I've got some property in the Florida swamps for sale at $100k/ acre and even though everyone knows its not worth it, the seller is offering to throw in a free boat if you buy now. I'm not buying the boat (panic rate cuts to save Al's buddies at the bank).

Talk about weak reasons to buy stocks, "dont fight the Fed" rates right up there with the best of them.

The similarities between the Japanese bubble and the 1999 Nazdaq are easy, both were manias where stock prices became disconnected from any measure of value. The only reason to own stocks should be to get a return on your investment (earnings or dividends) that exceed fixed income returns.

Also you should be aware that commercial traders are definitely fighting the fed right now. This weeks commitments of traders report shows the commercials net shorts increasing again to record levels on the SP500 and the short positions increased significantly on the DOW. They also increased short positions on US Treasury notes. So not everyone is singing the same mantra to not fight the Fed.

good luck though
M.
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