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

To: Casaubon who wrote (48748)	4/30/2000 10:25:00 PM
From: StockOperator	Read Replies (1) \| Respond to of 99985

Casaubon, Perhaps I should have phrased it a little better. We have a monthly reversal on the TYX which when coupled with the most recent economic numbers and the fact that the FED is most likely going to continue to raise rates until a more obvious sign of slowing in the economy. This reversal may mean the divergences in instruments like the 30yr and the actions by the FED may be coming to an end. Because of that any interest rate sensitive instruments (bonds, banks, etc.,) have to be played on the side of the possibility of rising rates overall. I take that back - Any stock picking strategy going forward, whether you like tech or value may have to be reconsidered if this reversal in rates is real. The question we need to ask is which sector will flourish in this kind of environment. Granted, at this point all we have is a reversal in an overall downtrend. What happens from here I believe will be important to watch. Just another piece of the puzzle.

To: Casaubon who wrote (48748)	4/30/2000 11:02:00 PM
From: StockOperator	Respond to of 99985

Casaubon, If I could let me also add my own thoughts on the FED's rate hiking policy and the markets overall. We have all been blown away during the past six months of NAZ action as well as the rest of the avgs inability to respond accordingly. In my previous post I made a comment about the formation of a possible H&S pattern on the DOW or the megaphone pattern that has unfolded. I think it's hard to argue that the FED's action has indeed had a much bigger impact on the older more established companies in the DOW, while many of the techs made their massive runs. That pattern for the DOW is pretty ugly and should weigh heavily on all our decisions on how this 14 month pattern breaks overall. Are we going to roll over here in which case we could very likely place a new low considering that's what this pattern overall would dictate. Or, more importantly lets say we push higher on the DOW and hit this upper trendline at roughly 12,000. Then what? There is going to be incredible resistance at that point. What will our investment climate be like then? Rates, Fed, new administration???? Way too many questions and not enough answers. Let me just say that personally I don't think we need to worry about those answers anyway. The blanks will always get filled. My concern will be how prices handle this upper resistance levels when they get there, and if they fail I will at least I have an idea how this pattern may play out. So far tech has appeared to be more resilient to rising rates overall. Let's see if it continues. Regards, SO