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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (16748)	6/10/1999 6:20:00 PM
From: pater tenebrarum	Read Replies (3) \| Respond to of 99985

Jim, you are right that there is no real fear - yet. i need to smell the fear so i can go long with comfort. a true washout would be very healthy, so i hope we'll get one. at the moment the market has a way of confounding both bulls and bears at every turn and that is likely to continue until the FOMC meeting is out of the way. btw, i do not think that the market has 'priced in' the rise in rates as many are saying. last time rates were this high, the market was a lot lower. what's priced in is a rebound in the long bond imo. if no such rebound is forthcoming, then the market will proceed to price in the higher rates. in my earlier post to Yogi i referred to some of the positives i can see here. i forgot to mention a major negative that goes hand in hand with higher rates, namely weak financials. the XBD chart shows a large triangle that has broken to the downside; applying standard projection techniques for this type of breakout i get a target of roughly 270 for this index - which would require a 33% decline from current levels. the BKX has also broken a short term support level, and after rallying back to it's descending 20-DMA has promptly turned back down again. my point is, with financials looking so weak, how is the market going to rally? a shrewd old operator i knew in germany when i was still trading german stocks once told me that i should always follow the banks when trying to determine the direction of the overall market. it was certainly true in germany... regards, hb