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

To: James F. Hopkins who wrote (33845)	11/20/1999 9:53:00 AM
From: Kip518	Read Replies (3) \| Respond to of 99985

liquidity ebbing from the markets ... From Barron's interactive.wsj.com (subsciption required) The combination of what the T-bill rate is doing -- which foretells what the Fed will do with the funds rate -- and what the LIBOR spread is doing --reflecting the market's actions -- constitutes what we call the Dual Interest Rate Model. This model has reliably called turning points in liquidity and thus the market during the Greenspan era. ... What is the Dual Interest Rate Model saying now? Be cautious. The tide clearly has turned, but has yet to run all the way out. So far, the change in trends has been relatively gradual. It is more like what happened in late 1992-93, when the economy was able to make one of its few true soft landings. Stocks wound up being "dead money" during most of 1994, not a bad showing considering the bond market suffered its worst year on record. It also stands in contrast to the sharp deceleration beginning in 1987, which led first to Black Monday; then continued slowing through 1990 produced the recession of 1990-91.