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

To: HairBall who wrote (39025)	2/3/2000 11:43:00 PM
From: Haim R. Branisteanu	Respond to of 99985

LG, there is an additional aspect of stock market hedging by overseas accounts - BUY STOCKS --SELL BONDS it is currency neutral, and with the economy expanding and more 401K and pension fund and general US mania it was a perfect trade. Now for some reason unwinding of those currency neutral hedges in liquid markets at a time that the treasury announces buy backs scrambled the picture perfect scenario, The rise in the dollar only agravated the issue as profit taking in the bond market was more intense (now taking profit in the bond market is not outright selling but unwinding of pair trades with 5y to 10y being the long side of the trade). I hope it helps BWDIK Haim