>>I read an article some time ago about Greenspan's market model that showed stocks over valued. The same article pointed out that if interest rates dropped, without prices changing at all, the model would show stock undervalued. That was 50 basis points and
several hundred DOW points ago.<<
I read something very similar. So now we're getting:
1) lower interest rates
2) good-sized correction in DOW and Naz
By these things alone we should have been done with the
correction a few days or more ago.
I think what aggrevating the valuation problem is the
sudden realization that ASIA is a big unknown again. Just
as we thought we had a handle on the problems there, they
are back in full force.
The reason why ASIA is so important is because, analysts
think it will drastically kill profits. They see
no visibility on the profits equation. Last quarter, analysts
thought that ASIA would get under control by 2nd 1/2 '98.
But now they're not so sure. And this is what's killing us.
So the market will lower prices to the point where they
are sure company profits will be acceptable, and then
maybe a we'll see a rebound, if ASIA problem looks
better, or if there is visibility on profits.
I always wonder why Europe is not factored into
profits more strongly...I think it's because they're
upturn is too young still, and they are also affected
by ASIA and possibly RUSSIA.
So, we're back to the same old question. When
are we gonna hit a bottom?
Even by WAYNE TA, I don't think we have that strong
of volume to indicate a bottom. VOLUME = 8,135,800.
I think we need at least 10,000.
Volume I think will be the indicator of 'the bottom'.
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