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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 671.91

0.0%

Nov 14 4:00 PM EST

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To: Wayners who wrote (72898)	3/20/2001 5:15:26 PM
From: jmootx	Read Replies (5) of 99985

The tape and Fed cuts Hate to say it, but there has been only one time since 1912 that the Fed rate cuts had no effect on stopping the slide in equities: 1929-1932. NASDAQ down 64% with only the 1929-1932 Dow to compare to, and the risk of earnings stinking into 2002, looking like 1200 on COMPX and possibly 850 in a harsh recession. Hey 850 would only be an 83% decline, better than 90% that the thirties Dow declined. The average PE ratio on the NDX for those with earnings is still 50, growth average for 2002 is 115%, but as we know there has been little revision there. If the recession extends into 2002, then that PE of 50 is very vulnerable given earnings are weakening.

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