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

To: Michael Watkins who wrote (40848)	2/20/2000 6:24:00 PM
From: Michael Watkins	Respond to of 99985

Occasionally I see something worth noting in "TheStreet.com". Jim Griffen: "... . The Greenspan solution then, roughly, would be 4% returns to equities for a period ahead until "macroeconomic imbalances" no longer threaten "our continuing prosperity." Won't that feel different? ... Old Economy stocks -- or the Dow, the S&P or the NYSE Composite -- have begun to struggle as the outlook for higher interest rates works its traditional effect. New Economy stocks are still too new to have a tradition or to respect anyone else's; the Nasdaq continues to levitate near its record high, having doubled in the past 12 months. And now, class, a pop quiz. Imagine that you own a balance of each sort of stock, both Old and New. Assume that Chairman Greenspan means what he says and that he goes on to accomplish what he means. That is, assume an increase in "wealth" no greater than the prospective increase in income. What are the implications for Old Economy stocks if New Economy stocks are in fact immune to Fed action? For extra credit, what are the likely differences in performance between these two classes if in fact New Economy stocks prove to be susceptible to Fed action? " I can imagine what might happen and am just waiting for the opportune time on a 45 min chart on the Nasdaq futures to pull the trigger. If I time things right, I will be 100-300 points in the money fairly quickly and will quickly get to the point where I can leave the trade overnight without worrying about nasty gaps up. At least that's the plan for now. The rules may change. ;)