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To: Bill Harmond who wrote (22)	5/10/2000 7:18:00 PM
From: Sonny Blue	Respond to of 57684

I think the bottom is near... Fence Sitters And Fed Fears By Tony Crescenzi May 10, 2000 12:30 PM EST Mortgage applications soared last week with the Mortgage Bankers Association's weekly mortgage applications index for home purchases up a robust 12.7% to 341.20. That is the highest since October 1998 and is 19% above the one-year average. The jump in the index appears likely due to the so-called "fence-sitter effect" whereby consumers rush to file mortgage applications out of fear that interest rates will soon rise. While this data clearly speaks to the resilience of the housing market, it is currently saying more about the extent to which consumers, and investors generally, have already discounted the likelihood of a 50-basis-point rate hike. Combined with the 80% probability of such priced into the fed-funds futures markets, the evidence overwhelmingly shows that the market's level of preparedness is sky-high. Therefore, if the markets get jolted by a 50-bps hike, it may represent a buying opportunity in both stocks and bonds, at least for the short-run.

To: Bill Harmond who wrote (22)	5/10/2000 7:45:00 PM
From: Mark Fowler	Read Replies (1) \| Respond to of 57684

Of the volatile trading Wednesday, [Todd] Bakar [director of research at Chase H&Q] added "the fundamentals didn't matter when these things we're going up to the moon, and these things don't seem to matter when we're going down."<< There seems to be some truth to this. Stocks get over sold and over bought to extremes. That sword cuts deep both ways at times. The reason for this sharp sell off today is because most of these indexes were moving up on a steep rising wedge pattern and that first trend up from the bottom is usually broken i find, thus the sharp sell down today when that trend line was broken, now i'm thinking this should be the wash out that one should start to build on. Hopefully we will start to see some positive patterns developing on these charts again over the next serval weeks. It'll be slow moving up again but at least i hope for the most part we'll see some positive patterns developing on these charts again.