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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures

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To: Patrick Slevin who wrote (3332)	9/5/1998 2:39:00 PM
From: SE	Read Replies (2) of 44573

Maybe someone out there can help me figure this out. This does not make sense to me. Greenspan says we are in a deflationary mode and everywhere on SI the word is all of a sudden bullish. This does not make sense. If we are in deflation, prices come down, earnings come down. Net debtors will feel a pinch, which I believe most in the US are...maybe that is wrong. The bond professionals are 98.5% bullish (I read that somewhere on SI earlier). If true, what does that mean? I know people are saying go into bonds, but somehow my gutt tells me to avoid bonds as an investment right now. I think 98.5% bullish is a bad sign for bonds. What did we have a while back, 80% of S&P traders were bearish or something like that. I believe that was at the most recent lows. I think I also read that the estimates on the S&P 500 are being cut and right now stand at $44 to $45, down from $48. If we are in a deflationary mode, would a PE of 20 or better seem reasonable? What if we figure the mid point $44.5 and a PE of 15....that is 667.50. Wow.... We have Russia and Latin America blowing up their currencies. We have Clinton with the possibility of impeachment staring him in the face. All this and Greenspeak says deflation and that means bullish? I guess I will never make a market prognosticator because it all doesn't make sense to me. I believe any rally that comes will be short lived and a great time to sell. Oh yeah.....and even though commidity prices are way down, it appears that oil is on the way up from what I read. I did not check the charts on this so I might be wrong, but if oil and gold are cooking, what does that say? Not to mention oil should be a strong indicator of higher prices since it is used across the board in production. If prices rise in oil, I would think other prices soon follow.... What am I missing? -Scott

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