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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: Chris who wrote (17656)11/10/1998 9:26:00 PM
From: Sergio H  Read Replies (2) of 42787
 
Ola Chris. A few notes on the upcoming Fed meeting and the interest rate question:

The market believes that the Fed will cut rates. If it doesn't happen next week, it will happen by Dec. Here's the proof:

Compare the 3 month T bill rate = 4.44%
decisionpoint.com

to the Fed discount rate = 4.75%
woodrow.mpls.frb.fed.us

The market sets the rate for the Tbill, maybe in anticipation of the Fed's action, and the Fed follows. There is rarely more than a quarter point separating the two rates. The current deviation is an indicator that the Fed is about to lower rates again.

The 3 month T bill has been moving up lately, reducing the divergence between the T bill and the discount rate, because of temporary oversold conditions in the value of the dollar.
decisionpoint.com

The Dow Industrials are too far ahead of their moving avgs. while the Russell 2000 is just kicking into gear. Barring any new data coming to light, big time rally for the small caps is coming up.
decisionpoint.com
decisionpoint.com

Sergio
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