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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (118)	6/16/1999 2:14:00 AM
From: kathyh	Read Replies (1) \| Respond to of 19219

hi jt, i have been a lurker on ike's thread for a few months, first saw your posts there... and now am pleased to be a lurker on your new thread as well... i just wanted to take a moment to thank you for your very informative posts, i am relatively new to all of this, and i really like the way you explain things in a clear, easy to understand manner, with lots of good charts and numbers to back it all up... your thread is a real learning experience for me and i really appreciate all the work you put into it... have a great evening... tomorrow and the rest of the week should be very interesting... kathy :)

To: J.T. who wrote (118)	6/16/1999 2:15:00 AM
From: Bart	Read Replies (1) \| Respond to of 19219

here is some of what they said Key to today's action will be the much anticipated CPI report... Briefing.com projecting monthly gain of 0.1%... For consensus estimates and prior month figures, see Briefing.com's Economic Calendar... Anything weaker than 0.3% likely to be viewed as positive for stocks, while number in excess of 0.3% would send stocks tumbling. Last week progressed pretty much as expected. The prior week's rally saw some followthrough early in the week, but rising interest rates dragged the market down sharply by week's end. The focus on bonds and the Fed will intensify this week. Though the FOMC meeting is not until June 29/30, the outlook for Fed policy will be determined this week. On Wednesday, we get the May CPI report -- the one that will determine whether the April uptick in CPI was an aberration or an indication of rising inflation. Though there is plenty of evidence that economic growth remains robust, the April CPI report is the only evidence to date of an inflation threat, and it is spotty evidence at best. The key on Wednesday will be the core CPI (ex-food and energy reading). After five straight monthly increases of 0.1%, April saw a 0.4% jump. If we revert to a 0.1% gain in May (or lower), the year/year core CPI increase will fall to its lowest level since 1966, making it very difficult for the Fed to tighten. If, on the other hand, we see another above-trend core increase of 0.3% or more, the Fed will undoubtedly tighten on June 30 and bond yields will rise further. The grey area is a 0.2% increase, which is the consensus estimate of economists. If we see a 0.2%, the Fed will probably opt for a tightening, but we'll get a much better indication on Thursday, when Greenspan testifies before the Joint Economic Committee concerning monetary policy. That testimony will be the other highlight of the week for stocks and bonds. It is quite likely that we will know by the end of this testimony whether or not the Fed will be tightening on June 30, making the meeting itself something of an anticlimax. For stocks, the week will get off to a rocky start due to nervousness ahead of the CPI report. If the report prints a 0.1% or lower core rate, as Briefing.com believes, a rally can get underway. A 0.2% is neutral. And 0.3% or higher keeps this summer correction alive, with Dow 10K the next downside target. Long Term View Valuations are at all time highs (S&P 500 P/E ratio was 32.8 as of June 11) while profit growth is minimal. True believers will say that profit growth is just around the corner, and that low inflation and interest rates mean that stocks can go higher. Briefing.com does not doubt that they can indeed go higher, but that will be due to the speculative nature of the market rather than the fundamentals. The bubble may very well keep expanding until something drastic occurs to change long-term expectations about profit growth or interest rates. When it does change, though, the risks will be very high. [ Index ] This page was downloaded by your browser Wednesday, June 16, 1999 02:06:48 ET and is the latest version available as of that time. Copyright © 1999 Briefing.com, Inc. All rights reserved.