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

To: pater tenebrarum who wrote (51272)	5/19/2000 3:21:00 PM
From: Crimson Ghost	Read Replies (2) \| Respond to of 99985

Heinz: A little simple logic. Must less sophisticated than complex technical theories, but worth considering. If I were an Administration policy maker I would be striving to assure that we will have strong markets for the several months prior to the election. How best to do that? Simple -- get all the pain out of the way by summer. If the market must be smashed, do it early so the decks will cleared for a strong rebound starting late summer or early fall. That is why those who opine that AG will not tighten further because it is an election year are wrong. He almost certainly will not tighten after August, but he could tighten a lot more by then -- another 100 points is not out of the question. In fact if I was a Gore advisor I would be hoping for a big market smash the next month or two. After all the lower it goes now, the faster AG will stop tightening and the bigger the potential fall rebound. Bottom line -- I agree that the market will trough by early summer at the latest. But looks like things could get a lot worse before then. Something like NAZ 2500-3000 and Dow considerably below 10,000 as the bear finally hits the old economy hard. I see the biggest risks in the financial sector. These look hugely overvalued in the current environment and most are near their highs. Especially considering that many of them make more from trading than from their fundamental businesses. What kind of a multiple are trading profits worth? I see more downside risk in the financials here than I do in the NDX.

To: pater tenebrarum who wrote (51272)	5/19/2000 4:33:00 PM
From: Michael Watkins	Read Replies (2) \| Respond to of 99985

Heinz - re extending the bear market, I think we may well see some deterioration in the balance not yet affected. While I'd prefer a surge to new highs and a failure to hold, the NYA is retracing after an apparent breakout from a decline that started in later April. If the NYA "old economy" generally speaking stocks were strong enough to fight the market tide, I would have expected the low of the tall white candle on 5/15 to hold. It did not today. Next of interest to me is the prior swing low at 624. That could easily be taken out in one bad down day and really would set things up for overall failure market wide. Recently we've seen NYA/old eco stock strength in the face of tech weakness, now that has changed. Monday could be very interesting. And, history suggests it will be a very big down day because its a holiday here in Canada and I will not be trading LOL! I'll post some charts if I have time before we head north for fun in the sun...