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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (16029)	12/29/1997 11:11:00 PM
From: IQBAL LATIF	Read Replies (3) of 50167

My targets on Friday -24th of Dec 1997- 'I will be looking at consolidation in ASEA for a while tonight and tomorrow and as we go into trading on Friday find some two positive closes in ASEA as a gift too difficult to Ignore. I expect market to reverse from here and have my first level at 962 and 262 on SOX- I still expect SOX and Tech. to trade above 280 within next 10 sessions.' Markets closed above 962 on SPA and SOX was unable to take out 262 SOX at these levels have found an interim support between 240 and 262 the resistance at 262 is quite strong and SOX after testing that level retreated from my target it signals a lack of enthusiasm for semis but I would leave my target of 280 within next seven or eight sessions a good possibility. Today's market action in Japan is solid, so far after trying all day yesterday to see some kind of follow-up in ASEAN markets after Japan out of the gates dropped to 14500. The speculators got the hint today and even last night Nekeei futures were trading at a huge premium indicative of a rally this morning. I see a strong short covering rally above 15600 taking up this index to 16200 within a week- ASEAN economies are going through a difficult time but none of the indicators are giving me a 'deflationary sharp reversal' possibility in short term. Rather markets have priced much higher level of pessimism than ordinarily required but such are the markets this is one of the prime reasons markets are here these markets take no prisoners and shorting this markets have always been a trauma. Last night rally is a good example- a close around 965 above three resistance's like 955 960 and 962 is a clear indicator of kind of pent- up demand of equities. Now as I pointed out earlier that we are going to new highs with MSFT INTC and IBM or TXN at much lower values this bode very well for SPA between 968 and 980 is air only and from there to 1000 is stone throw. On long side we have seen a steady market move up, composite is now moving along very well and I see in Jan earnings a predominant possibility of upside. My levels of today are a break of 968- numbers emanating will be strong and we will play this strange 'yield curve' divergence to its full- yields are going to correct to 6.15- 6.20 region as numbers come in test of 950-55 on SPA is on cards even if 980 is tested I will be looking at longs on weakness and will try to establish some put options at 960 if we see 972 break today towards the end a 2 to 1 strategy can be great- buying some nearer puts as strong numbers will give me a trade on short side. Strong numbers will lead to short term hour weakness but a sharp reversal- on bonds 118 puts will be a good bet. Japanese and ASEAN markets will by 10th of Jan take out 16200 and will move unto resistance of 16,800. The yield curve peculiar flattening indicative of a slow down is an opportunity for me and that is how I am treating it I expect yield curve to return to its normal shape within 45 days premiums of quality disappear, whenever historically yield curve a forward looking indicator of market is skewed with external influences such as 'fear' the deductions from a flattened curve has been wrong and you will see as markets attain normalcy and 1929 Bs is forgotten with so called Japanese and ASEAN bankruptcies yield curve will consolidate and instead of inverted possibility will give an indication of non- inflationary growth oriented yield curve last time we had it was when SPA took out 770- I will reiterate my concerns if numbers start coming weaker that will be a sign of market weakness and at the earliest signs we will initiate short positions at the moment enjoy the ride. Shorts agony continues the drop that came a mirage is nowhere to be seen.

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