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To: C who wrote (34116)	11/15/1999 4:45:00 PM
From: Going Short	Respond to of 41369

Sent to me from Invest Tools the Wall Street Digest I belong to: ú Friday, November 12, 1999 ú This is the Wall Street Digest Hotline Update for Friday, November 12th at 6 p.m. More good economic news on Friday morning pushed stock prices higher. At the close the Dow Average gained 174 points. While the Nasdaq gained 24 points. December and January are the two best months of the year for the stock market. Time is running out for a severe market correction. The last obvious hurdle will be the Fed?s Open Market Committee (FOMC) Meeting on Tuesday, November 16th. I expect a 1/4 point increase in the Fed funds interest rate which the market is not expecting. If the rate increase unfolds, I expect the market to correct briefly then head higher. Technology stocks historically, do not react well to rising interest rates. However, this historical tendency seems to be more than offset by a flood of money from the Fed and an increasing flood of money from pension funds. Plus, money is now beginning to flow into the U.S. stock market from abroad because global liquidity is rising and U.S. Internet stocks are the best show in town. Rising global liquidity has substantially decreased the chances of a global financial crisis. My intention is to observe the market?s reaction to the Fed?s FOMC announcement on Tuesday (usually at 2:30 p.m.). If the Fed does not change rates, Wall Street will view this very positively. The Fed will have essentially ?blessed the current rally?. Stock prices could explode after a no rate increase announcement, which is something the Fed does not want. It is my belief now that a rate increase on Tuesday will slow the current rally only briefly. An unprecedented flood of money from the Fed, from pension funds and now from Asia, Japan and Europe, must go somewhere. Investors both here and abroad apparently perceive Internet stocks as the safest place for investment funds because the future growth of the Internet is unlimited. That is the only possible reason to justify purchasing AOL with a P/E of 332, Yahoo with a P/E of 471 or Cisco Systems, the bluest of blue chip stocks with a P/E of 102. Depending on what the Fed does with rates on Tuesday, I plan to issue buying instructions for specific stocks and mutual funds on either Tuesday evening or Wednesday afternoon. Do not purchase bonds or bond mutual funds now. Long term interest rates have a consistent history of rising in January and February. I plan to sell all bond positions at the bottom in December. Keep in mind that at current levels of historic overvaluation, a correction could unfold without warning. The best six months of the year for the stock market is directly ahead. However, I expect stock profits to unfold in a very narrow group of stocks from the Internet, Technology, Electronics, and Telecommunications sectors. Next hotline update will be Tuesday, November 16th at 6 p.m. eastern. Though you might find this interesting reading.