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

To: Lee Lichterman III who wrote (23395)	8/19/1999 8:06:00 AM
From: donald sew	Read Replies (2) \| Respond to of 99985

Lee and all, I want to mention again that I am not convinced that the a .25% rate hike is priced into the market right now, as so many are now assuming. I would be more comfortable to say that it was priced in if the rates right now were in the 6.25% range, as it was prior to the PPI last week, but now that the rates are in the 6.00% range, is it possible that it is no longer priced in. Last week CNBC reported on some survey that of the number of economist questioned all ot them expected that GREENSPAN would increase rates, and most of the analysts appearing on CNBC appear to have similar views. So, in light of that it is not hard to get the image that the .25 rate hike is already priced in. However, CNBC's correspondent at the CBOE(RICK SANTELLI) indicated last week that 3 to 4 out of 10 floor traders he interviewed did not think that GREENSPAN would NOT increase rates. This gives a different picture, assuming that RICK SANTELLI did a viable study. Again, my position on whether the rate hike is priced in is one of uncertainty. Well we will find out soon enough, since if GREENSPAN increases the rates and the the rates climb back to 6.25%, then it would be logical to conclude that the rate hike is not priced in when it was in the 6.00% range. If that is the case that the .25% is not priced in right now, it may not be illogical to assume that if the rates gets back to 6.25% the stock market may sell off some more. Again, I am not one to make strong predictions in either direction, since I am only comfortable with short-term(1-5 days) prognostication, which brings me to another topic, that of probability. My position concerning long/longer-term predictions is that the highest level of probability that can be obtained is around 62%, just a bit better than flipping a coin. I do not have the time right now to explain that position but will in the future. If I am correct that the probability of long-term predictions is only at best 62%, then maybe it may not be all that wise to make and trade according to such. seeya

To: Lee Lichterman III who wrote (23395)	8/19/1999 8:15:00 AM
From: donald sew	Read Replies (2) \| Respond to of 99985

Lee, Forgot to mention in my last post of the possibility of the 3-DAY pattern occuring again. Right now the futures are slighly down and even with fair value factored in it is still not down alot, so we may get a flat day today in light of getting a strong down day yesterday in the DOW. I mention it again since it is common for some or even many to conclude that the selling is over if today is flat. The economic reports have not yet come out this morning so that could effect whether or not we get that flat day. Yesterday was DAY-1 of my 3-DAY PATTERN. seeya