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

To: StockOperator who wrote (48749)	5/1/2000 12:28:00 AM
From: marginmike	Read Replies (1) \| Respond to of 99985

If bonds falter there are many who after last weeks lessons, will take 6 3/4 -7 1/2 % and the hopes of a 10% coupon increase and sit out the volitility. This could divert liquidity out of equities at a time when liquidity is already being withdrawn. If Oct 98 was a lesson, it seems apparent to me that we rally here only to sell off again. The lack of fear, put/call and lack of redemptions is troubaling and puzzeling. The American public assumes that everything is OK, but is it? IF interest rates continue higher in light of shrinking margins due to competitive landscape and slowing wealth effect is this a good enviroment to buy stocks? If US growth slows to 2-3%, which in light of Naz sell off and rates is enevitable what will happen to Japan and Chinese recovery? My opinion is that Inflation at 4% whille Margins for big corporations slide is a bearish scenario. It is one that the market has not discounted in yet. Heck things are good in techland, but that can change in 2-3 months. There is way to much optimism priced into market. In 98 after devaluation in Thai we all thought, heck the markets are down but the world is OK. It wasnt OK and in OCT there was a rude awakeneing. I think we rally to low 4000's then we head for the 2900-3000 range where there is a base of support. The Naz is in no mans land here, and even if we go sideways and base build the odds are we continue down another leg.