MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 26 4:00 PM EST

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To: StockOperator who wrote (3455)	1/7/1999 7:54:00 PM
From: eabDad	Read Replies (4) of 99985

SO- As someone else who did a little chest beating (but obviously did not get noticed much <g>), I will offer some tempered optimism here. I am watching the bond market with much concern. A month ago I posted this, and I still agree with it for now... Message 6715980 I tend to follow multiweek and multimonth trends in the market rather than daily action (I bought March OEX calls for the recent run up!). When one does that, some highly predictive things can be developed when are based on fundamentals. Generally, major bond market tops are followed by major stock market tops. The average lag time in for the stocks peak is 16-18 weeks (about 4 months). During this time, stocks usually go to all time highs in an explosive manner, and the money flow is out of bonds and into stocks. The 30y yield low was near 4.7% the first week of October. Major resistance downward trend lines are at 5.25% and just under 5.4%. Today 30y yield is 5.22%. If bonds do not rally hard in the next couple weeks, I think a major stock market top could occur in late Jan/early Feb. Will start to raise cash toward the end of next week. Rally should be fun the next couple weeks. Z

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