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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (27992)	9/16/1998 4:13:00 AM
From: Philipp	Read Replies (4) of 94695

Greenspan As we all know, Greenspan has the power to move the market at will. He decided when it was time to stop the bubble, he prevented the mini-plunge from turning into a full-blown crash. Since the immediate crash alert is definitely off now, he has achieved what he wanted, though we are probably still 1000 to 2000 Dow points above his preferred value. My prediction for today therefore is that in his speech he will strongly dampen interest-rate-cut hopes and make clear that he does not think that the market is undervalued (note the Bank of England and the Bundesbank have already done that). I therefere predict that his speech will mark another, this time short-term top. If there is a significant rally before his speech that could be a good opportunity to get out-of-the-money, long-term puts, since the premiums are relatively affordable right now. Of course, it is always possible that the market misinterprets his cryptic language again, but Greenspan has a history of correcting misinterpretations of what he said quickly in subsequent speeches. Good trading to all, Phil

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