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

To: Trey McAtee who wrote (16939)	6/11/1999 5:36:00 PM
From: pater tenebrarum	Read Replies (3) \| Respond to of 99985

Trey, i believe the fed uses earnings yields and long bond yields in the calculation of it's model; i will look up the details and post them later. allow me a general remark regarding the k.benjamin theory: if really rates at current or even higher levels should not be a worry for the stock market, then why is it going down? if benjamin were right, the stock market would ignore the recent rise in rates and continue merrily on it's way up. interest rates are in fact the most important factor determining the course of stock prices. i won't go into all the reasons why this is so,as i assume they are known to you. as 1987 has shown, the stock market can withstand a rise in rates up to a point on the back of better earnings, but the pre-eminence of rates always reasserts itself. regards, hb