To: White Bear who wrote (33127 ) 3/24/2000 9:56:00 PM From: LastShadow Respond to of 43080
It is intersting to know what others think about the FOMC and Taxes and the meaningfullness of, say, the effect of an unexpected change in the Consumer or Producer Price Index on the markets. But I would like to think the intent of the thread is really understand how to utilize those effects, changes, conditions and impacts in our trading. Given that the Feds have raised rates again, and granted I think they could achieve the desired effect by simply raising margin requirements, I am trying to figure out how to factor continuing rate increases against sector rotation, large to small cap switching, and the new two-market theory into my scans, screens and watch lists. Looking at this chart: stockcharts.com I against the week before and after the Feds raised interest rates, and at this one: stockcharts.com it appears that the large caps are affected the most by rate changes (going down steeply), while the small caps with the media or subsector or current attention receives the benefit of it. The mid caps are stabler for those time frames. Therefore, it would seem that you should exit large cap position holds a week or two before the next rate adjustement and make some tactical day-to-week trading plays in small caps and/or invest in mid caps for shorter terms. The best time to buy tech IPO's are during major down days, and sell shortly after (within the week). This is the strategy I have been playing for a few weeks now with stocks like XRX, MCD, IPRT, PRTS, etc and the other posts for tech stocks. The neural net has confirmed the pattern IN GENERAL, but still requires some refinement. If anyone has some input along this line, I would appreciate it and find a way to test or screen for it. lastshadow