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

To: Les H who wrote (16999)	6/12/1999 12:19:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 99985

Hi Les; I'm a believer that water eventually finds it's own level, while it may slosh around in the tank, and checking the level at the center don't get it if the ship had a list or is out of trim. I have my own trim table for the stock market. Divergence's always resolve them self over time , ( often exceeding and going to extremes the other way ) Now again it seems amid denials we have the much unregulated offshore hedge fund problem. This time it's with the funds who where on the opposing end of the bets that brought LTCMs assets into the hands of the investment bankers at pennies on the dollar. Which with CreemSpams help they unwound at a hefty profit. --------------- Putting all the canned news and sound bites about interest rates aside and just looking at the divergence in the market , for them to resolve will take a huge capitol inflow into blue chips ( very doubtful taht will happen ) or the others will adjust down ( and likely more so ) When the crossed swords of April 14th fix them selves they most likely will over do it. So with only divergence I see another 9% down side to the S&P index before the market can find itself. A slight of hand may make this more or less in the eyes of most beholders, but if you latter adjust it for the Dollar index I think you'll find 9% was sort of conservative. ( 14% total from the highs ). All this without regard to the interest rate debate, and just based on water finding it's own level, the sheer magnitude of the divergence's indicates this ship is not in trim, she is down by the head, and her arss is sticking up. If by some trick they can devalue the dollar again then we may not see the extent of the correction. We did not see the full amount of the fall last October, on an internatiol scale we lost 10% more than we saw, and the internationl broker dealers using money swaps came in and bought the market at a 10% discount to what even the best domestic market timer got it for. Jim