Stocks Crossing The 13 Week Moving Average <$10.01 Message Board

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Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01

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To: James Strauss who wrote (10021)	10/4/2001 7:01:31 PM
From: Sergio H	Read Replies (1) of 13094

<With recessionary pressures keeping inflation intact, it was just a matter of time until interest rates fell below the rate of inflation... > Jim, the recessionary pressure allowed the fed to lower interest rates below inflationary rate, as you pointed out. Same situation occured when Euro Central Bank lowered rates a half point subsequent to 911, after hesitantly lowering rates only a quarter point shortly prior. Amazing how quickly the economic outlook changed. Inflation is not necessarily a negative. The danger in the fed rate being lower than inflation is evidenced by Japan's current economy. There is a lack of confidence in Japan's economy to inspire investment. The same thing could happen here. On the positive side, if fed policy is successful, inflation will kick in. Low energy prices could be only a temporary situation. Labor shortages are forecast for the near future. Labor, energy and our current fiscal policy should push our economy into inflation sometime next year. On IBB and IYH, both charts are under the 200 day MA. IYH has a lower gap that is likely to fill while IBB has an overhead gap. Both are facing overhead resistance as you mentioned. I like both for long term plays and bought them for my IRA. As we discussed before, the baby boomers will place a heavy demand on the health service sector and there is increasing interest in biotech developments. Sergio

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