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

To: dclapp who wrote (34708)	12/4/1999 2:25:00 PM
From: snake	Read Replies (1) \| Respond to of 99985

Would one of the readers please help me with a novices question??I dont understand completely what is meant by "filling the gap" is there a graph someone could post to explain it to me??? thanks....snake

To: dclapp who wrote (34708)	12/4/1999 5:10:00 PM
From: saket chadda	Read Replies (4) \| Respond to of 99985

Thread/LG et al, I want to clarify this liquidity stuff everyone is talking about. For all the money a person owns, he or she usually has less than 1% of it in paper. Check your wallets, and your coin drawer to confirm it. In actuality, for all the money that people own (in the market of plastic money, stock money and Byte money), there is only 2% of it represented by paper money ($$ bills). With this background, the fed focused on one possible scenario that they can fix. Consider this: In my neighbor hood (typical middle class), almost half the people are preparing for Y2K (water, batteries, canned food, gasoline the works). It is obvious to conclude that the same people will go out and withdraw large amounts of cash (as they expect a problem). Usually, the same people would have no more than $100-200 in their wallets at any given time. The same people will withdraw $1000-2000 to be safe. I foresee two possible outcomes due to this: 1. Larger number of burgularies(Be careful), 2. shortage of paper money that may lead to panic. The second outcome is what the fed is working to ensure does not occur by printing more paper. BUT BY PRINTING MORE PAPER THEY ARE NOT INCREASING MORE MONEY FOR PEOPLE TO INVEST IN THE MARKET. Therefore, i don't buy this "market going up due to the fed printing more money argument (please correct me if you have a different viewpoint)." Market is going up because, the common man has become interested in making the same money their freind is making. Historically, this has been the sign of getting out of the market. In the mean time, you have to put up with, "xyz is making so much money in the market, why don't you also day trade". This reminds me of the poem by Kipling called If...... .........edit If you can keep keep your head, whilst all others around you are loosing theirs and blaming it on you, then youre a man my boy, go conquer the world. .........edit Further, all the fed is ensuring is that if there is no Y2K related problem, we don't have a self fulfilling problem. They are not doing anything about if there is a real problem and the Nasdaq or Wells Fargo or United Airlines computer systems malfunction and there is a financial melt down due to that. With market valuations where they are and Y2k approaching, If I were in the market, I would be very very careful. Easy come easy go. Regards SC PS: LG my charts were also saying a short term down term, until the unemployement report came out. One thing that I noticed was that the institutions were net sellers in most of the stocks I follow on friday. I think this was a head fake bull trap.

To: dclapp who wrote (34708)	12/6/1999 9:24:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Doug, simply put, the Fed is now indeed 'trapped' by the bubble. my guess is that even after Y2K, they will not do anything that might pop it. meaning, the sea of liquidity will NOT be withdrawn, unless something occurs to force the Fed's hand, like a collapsing dollar, bond market or both. i expect them to feed the beast as long as that is possible and hope for a miracle. no miracle will be forthcoming however. imo the end will be a hard landing, the 'reason' for which can not be identified as of yet. since the Fed is not prepared to stop the bubble from inflating, they will drive it to the stage where the whole thing will likely end in a classic systemic collapse...i recommend reading Ludwig von Mises's thoughts on credit expansion driven bubbles. these are the possibilities: either credit is reduced (not an option with the Greenspan Fed), causing the bubble to burst, or it isn't, in which case the whole system eventually collapses. third possibility: we are indeed in a 'new era'. regards, hb