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Strategies & Market Trends : Three Amigos Stock Thread
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To: LTK007 who wrote (11022)12/5/1998 9:24:00 PM
From: Sergio H  Read Replies (2) of 29382
 
Max, my only concern with the OEX is that it doesn't collapse and crush the overdue small cap renaissance. I switched all of my retirement accounts to small cap index funds.

The market is doing 360's about twice a week based on interpretation and over reaction to the latest economic data. I don't think that the OEX volatility will evaporate, but short term slides will be offset by short term pops. The small caps in the meantime will benefit from investor confidence that the sky isn't falling and it is safe to establish positions. (The volatility also creates great opportunities for TA traders.)

Last week's employment numbers clouded the picture. It looked emminent that the Fed would once again lower rates this month. The strength of those numbers certainly changed the picture. Small caps tend to benefit most from rate cuts, but the employment numbers are also a primary small cap indicator. A decrease in the employment numbers as a trend would be a small cap killer.

Amigo Sergio
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