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

To: Les H who wrote (52715)	6/1/2000 11:13:00 AM
From: Tunica Albuginea	Respond to of 99985

Les Horowitz:Joe Granville,<vbg>;A voice from the past: Buy. Barron's :The Granville Market letter Marketwatch: " In 1994 and 1995 the Fed raised rates seven times but the stock market had already turned up before it was through tightening. . . . " TA -------------------------------------------------------------------------------- interactive.wsj.com The Granville Market Letter P.O. Drawer 413006, Kansas City, Mo. 64141 May 18 ~ Webster defines a paradox as ''a tenet contrary to received opinion; also, an assertion or sentiment seemingly contradictory, or opposed to common sense, but that yet may be true in fact.''. . . The paradox is simply this: Currently there are two schools of thought regarding the current A/D [advance/decline] line. One is dead right and the other is dead wrong. On the one hand, we have some bears who contend that the A/D line in its current position will end up dragging down all the major indexes with it. On the other hand, some bulls contend that the A/D line has bottomed and is about to rise and eventually recover. While the bears think that that is opposed to common sense, it may yet be true in fact. The bulls have history on their side. As bad as the A/D line looked at the end of 1994, it was followed by a full recovery rather than the fall I had expected at that time. . . .The current chart of the advance/decline line. . ..looks very much like that 1994 chart. I am not going to make the same mistake twice. Not only are the two charts almost identical, but we also have a very interesting parallel with what the Federal Reserve was doing. In 1994 and 1995 the Fed raised rates seven times but the stock market had already turned up before it was through tightening. . . . The Dow bottomed in December 1994 under 4000 while the Fed continued to raise rates. It wasn't until July 1995 that rates were lowered. -JOSEPH E. GRANVILLE ================================= Message #52715 from Les Horowitz at Jun 1, 2000 10:42 AM ET Mechanical Nasdaq Buy Signal Very Close stockhouse.com