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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (634)	6/13/1999 5:47:00 PM
From: Raymond Duray	Respond to of 18137

Hi Alan, You could very well be right, I'd feel more in agreement with you if the Dow were around 9,500. But I want to drop this dreary topic and move on to something that is far more interesting. Arbitraguers....To Your Marks........Get Set...... biz.yahoo.com QWST is in the fray on the GBLX/USW merger and just for good measure, has decided to pounce on FRO in an attempt to thwart Winnick's wunderkind. Nacchio and Anschutz appear to be willing to pay a hefty premium (though not in cash, of course), and I would just have to guess that we might see some volatility in the involved companies. I'm wondering, anyone got a thought on how to make a buck or two out of this maelstrom? FRO closed Friday at 55 and change, QWST offers 75 in stock and cash. USW closed Friday at 54 and change, Qwst offers 80 in stock. Also mentioned was the assumption of 11.4B in debt. (Don't know who's) Dazed but unfazed, Ry

To: TraderAlan who wrote (634)	6/13/1999 6:22:00 PM
From: Bilow	Read Replies (3) \| Respond to of 18137

Hi TraderAlan; Admittedly this is from a guy who plays the tic charts (the 1-minute bars are too slow for me), but here's my analysis of the current situation: First of all, I think that long term rates are more correlated with stock prices than short term rates. This is cause it's the long term rates that define mortgage costs and bond yields. The problem is that long term rates have been increasing all year long, but so have stock prices. In the past, this has been a situation that caused stocks to catch up with bonds to the down side. Here's yahoo's chart of long bond (U.S.) interest rates vs. S&P500 for the last few years: quote.yahoo.com^TYX&d=mys The thing to notice is that when interest rates are in a rising trend, the S&P is usually flat or even down. Examples are 1/94-12/95, 2/96-8/96, 11/96-4/96. But bond yield has been increasing since 9/98, while the S&P500 went up a lot. This is a bubble. We should see S&P500 back to around the October 98 level within a couple months. I'm talking about a 25% drop from current levels of 1293 to around 1000. For this reason, I don't think daytraders should be holding underwater long positions in the hope that they are going to be made whole by the secular bull market. At least not without the patience to hold for a lot longer than expected... -- Carl P.S. Here's a chart for the same period showing a typical bond fund vs. the S&P500. Note that this bond chart is the inverse of the above bond chart, cause bond funds go down when interest rates go up: quote.yahoo.com And here's a chart of the 30-year bond only, so you can see the tops and bottoms more clearly: quote.yahoo.com^TYX&d=my