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

To: Paul Viapiano who wrote (2606)	8/10/1999 1:47:00 AM
From: -	Read Replies (1) \| Respond to of 18137

Bonds and Stocks The Bond Market is always 'thinking ahead' of the FOMC... the fear here is (e.g.) a double-increase (50 basis point) hike; there is genuinely 'new' economic/inflationary information being factored into the market right now. The Long Bond Futures are doing the work for the Fed ahead of time... that's the way it works. Understand, there is like a magnetic relationship between the Bond Market and the Stock Market. When rates are higher (lower Bond prices), the larger Bond market acts as a "magnet" essentially pulling (institutional, conservative) money out of the stock market into Bonds, and vice versa when rates decline. This is a very powerful, time-proven relationship that every trader should understand and respect. For example, Williams, Conners, Raschke(etc) have published many excellent stock index futures swing-trading setups that incorporate/exploit this well known relationship. Any S&P Futures trader worth their salt watches the Long Bond like a Hawk real-time; this relationship is why. Here's another reason to read Cramer and GARY B SMITH (Hi Gar;), they know all about this relationship; Cramer has written many insightful peices about it. Sometimes other factors temporarily move in (e.g. a strong earnings season) and overwhelm the Stock/Bond market relationship... but sooner or later, they will re-couple. It is like the moon and the stars. -Steve