The 56 Point TA; Charts With an Attitude Message Board

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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude

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To: Sergio H who wrote (6446)	10/27/1997 8:35:00 PM
From: Zeev Hed	Read Replies (1) of 79273

Sergio: I think that any rally here (and only later in the week) will be a dead cat bounce. My fear is that the Japanese market is going to collapse severly (and I mean break 14,000 and possibly make a new bear market low), and that will cause our own interest rates to increase as I will attempt to explain below. Why? The overcapacity that has been built up in high technology as well as in basic industry in the pacific rim is now going to be supported by even lower wages as country after country are goping to devalue their currencies to prevent the flight od capital that is plaguing them. The Japanese banks faced with additional losses to the real estate losses they still have on the books from the bubble will have to reliquify by selling, you guessed, US treasuries of which they have a bundle. Result higher interest rates here (and word wide, when we need them the least. The combination of rising interest rates and deflationary pressures (because of the capacity oversupply) will be murderous. I would not be surprised to see the market another 1000 points lower by the end of the year (my next line in the sand at 6200 <VBG>.) I cansee companies like MU going to the low teens, AMAT the low 20' before early next year we once again start and resume advances (if wwe have not entered a chinese torture bear market, which I do not think we will, I see more a very fast and furious readjustment of values). If the market is liquid tomorrow, then we might have an afternoon strong rally going for a day or two after that. But I would be a seller into these rally (not that I have much to sell, I was lucky to unload all me semi about three weeks ago, as I mentioned on the WFR and golddiger threads). Interesting times ahead.

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