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Strategies & Market Trends : Waiting for the big Kahuna
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To: Berney who wrote (20262)6/13/1998 2:22:00 PM
From: Gersh Avery  Read Replies (2) of 94695
 
Berney .. I've been watching your work for a while.

Your very good. I admire the amount of work that you put in.

Your shift into TA has been a work of art in process.

FWIW:

Something to take into account, that most people do not, is the daily Fed actions. They do one of three things: add, drain or nothing.

What they are working with is liquidity. This is a liquidity driven market. If the Fed drains liquidity for three days in a row the market has no choice but to go down. If they add for three days in a row it can only move up.

While the Fed is draining you hear comments like "this market is tired", "the market just ran out of gas", "up at the open then lost momentum"

Why this effect? I believe that everybody is leveraged to the max. Leverage is borrowed funds. For the Fed to drain funds is just like a margin call. The effect usually has some time delay to allow for settlement dates.

Last Tuesday the fed drained for the first time in about 10 days. The market went up. This blew my mind so bad that I broke my TV set and went long with my 401k. It took until the next day for the action to have its effect. Friday AM the fed announced that it was adding liquidity. I figure three or 4 days of upward movement for the markets, baring any major news.

If you are able to backtrack the fed info please let me know, as the information is very thin.

Hope this doesn't confuse you.

Gersh
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