<<If Aug in 97 can be a strong month and Oct a weak- it necessarily does not mean the Oct may be a soft month..it can be Aug of 97-->> this is the post when bonds reigned supreme at 134-35--- Ike said bonds does not belong to here and market moves up---
This was in the middle of the last bear move- I gave rational as to why the move down will fail-- Look at the argumnets and now with the benefit of hindsight we were so right on the ball-- this is what I call working for that perfect interpretation of markets...
Posted on Idea thread and buried somewhere--
Only earnings momentum will settle the issue all interim rallies are meaningless, we will keep establishing defensive positions on rallies but comes end Sept--- get out of all short positions we will see consolidation between the band of 910 and 990- most probably around these levels - 1030 will be the top unless we crack this from earnings momentum you will have two opinions about the strength of any move-- for me it is best that market keeps trading between 910 and 990-- so as to have that coil which I will consider as a part of the whole cycle and extend it backward to July 97 when we were struggling to take out 1000- with four quarters behind us since July 97 I would see no problems in next earning seasons to blow of much lowered expectations.
I think the real action in two weeks will be in bonds and not in equity markets, the bonds will not stay where they are, this is the trade, the equity markets have built a slow down as we go forward but the economic numbers so far are not indicating that slow down, we have seen hourly earnings as one evidence new home sales as another, consumer confidence as third in a deflationary situation these are not the leading indicators of a economy which is slowing down. The action in ASEA and HSI tomorrow will set the tone for Europe, it looks like that after a initial lackluster trading session it is going to be news about Russia and HSI which will lead the bourses.
Best of luck--- I hope we see this consolidation between 910 to 990 taking a firm root until earnings come along-- in the meantime the emphasis will gradually shift to bonds. Is 2000 points minus on DOW not enough a price for weakening economy- a 20% shave off S&P literally means that market is expecting an built in a huge corporate earning slowdown, mind you that this round of selling was not triggered by low earning expectations it was triggered by Russian security problems, the prospects of troubles spewing out in West Germany, the problems of peg in HK and a prospect of meltdown in ASEA as China devalues, none of these rumors which were at the top of agenda have come out to be true, now with a hair cut that S&P has got and all this negative built in the market any positive and strong number plus confirmation of new PM will trigger a very different kind of environment, the bonds and political uncertainty priced in the market means a third rejection of Russian PM and very docile economic numbers none so far is true... the delivery time approaches as corporations close on to next quarter announcement. If Aug in 97 can be a strong month and Oct a weak- it necessarily does not mean the Oct may be a soft month..it can be Aug of 97--
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