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

To: fedhead who wrote (34592)	12/2/1999 8:02:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Anindo, the bond market wasn't 'wrong' in '94. the main difference between now and then is that we are at a completely different valuation level and that the manic speculation of today was absent in '94. also, the Fed did it's job in '94 by raising aggressively in order to pre-empt inflation. now they are so scared of the bubble that they are tip-toeing around and increasing the money supply at it's fastest rate ever. the bond market doesn't like that...the economy is clearly overheating, and unless the Fed gets aggressive, something will have to give. of course, if the cycle work i'm following is correct, the mania should actually last well into next year, unless the bond market decides to kick it sooner. there are some signs btw that the bond is nearing a short term bottom....put/call ratios on bond futures contracts have increased markedly recently. regards, hb