Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Mandinga who wrote (5362)	3/22/1998 10:09:00 PM
From: Lazlo Pierce	Read Replies (2) of 18691

I think the key will be to watch the 30 Year bond rate. One can make a case (and indeed many have), that interest rates in the 5 - 5 3/4% rate support higher valuations. In fact with low oil, and the current "new paradigm", many have predicted rates below 5%. However... with real GDP growth still exceeding 4%, and the labor market tightening, with pay rising, the bond may see rising oil prices as very threatening. If the bond goes below 6.25% we will see a substantial (maybe back below 8000) correction. If the bond starts drifting toward 7% again, watch out below. In other words, keep an eye on the bond. Dave

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