SE, all good questions, and unfortunately I can't answer any of them. I would assume by definition that the first cut or two almost always comes in a market trough, but I'm sure you could find exceptions. By sheer probability, though, I would say the odds are pretty overwhelming that we will make new highs. If I remember my statistics correctly, you need 25 years of market data for something to have a greater than 90% probability of being true in the future, and this is a trend that goes back to the 1950s. Throw in that we are entering the strongest year of the presidential cycle (a fact that no doubt influences Fed policy), and I think 1999 should be a pretty good year. You could argue that we need one more cut in the dicount rate to complete the cycle, but I believe Zweig has said the third cut may not be necessary. Just my opinions, of course, and I should add that I completely missed the bear market signs this summer, as I'm sure Mr. Whitman would be more than happy to point out.
Paul |
