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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (24004)	6/3/2000 1:56:00 PM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 42787

Posts I just made from our site. Post #1 By L3_aka_l3 on Saturday, June 3, 2000 - 12:57 pm: Wolf good topics for discussion. Did AG go too far too fast by trying to get rid of the euphoria in the stock market, bad loans being given out by the bucket full etc and by using the blunt interest rate hikes at the same time as Treasury liquidity FINALLY started abating somewhat, push us toward recession or stagflation? Heck if I know, this is Heinz's specialty as all that deep deep financial global economy stuff is over my head. The worst part is AG obviously did not curb the euphoria in the market except short term. Just in the past week, I have seen stocks jump 30%. Issues like HLIT, PMCS, RFMD, FLEX etc are spiking hard. Unfortunately this is where things get complicated. As you said, your system is giving you sell signals and I am getting some too and expect more. My system is swing trading biased and finds a normal curve, high low relationship along with Stochastic, CMO etc to arrive at a "big picture type" trading band. This works great in trending and sideways markets but is down right lousy when a major shift occurs such as major tops in the blow off phase or bounces back up after a steep decline such as we just had. IF, and I repeat, IF this is the beginning of a major move up, over bought indications based or using cyclic indicators like stochastic, CMO, diverged MA relationships etc will all show we are over bought yet the market can continue to rise for a while until a "new Norm" is established. I do believe firmly many of these stock price rises are already over done since a longer term trendline easily shows that they are over the tops of their normal trading ranges and this is NOT the best of financial conditions to warrant a new, improved paradigm. We still have higher interest rates, weakness in Asia, Russia and Latin America. We are seeing some of our own large funds and insurance groups struggling or folding. The treasury is reducing debt and issuance of liquidity and the remote chance that the Fed may have restricted capital too much for some of the older style businesses and small business types that would be buyers of technology. AG's tightenings are a threat yet they really weren't that tight. When you factor in the inflation rate, the amount of capital injections put in last year up to the Y2K deadline and then figure out where we are now, we are actually still too lax and need more rate hikes. The problem is if the foreign shores have another crisis due to higher fuel costs, financial mismanagement or inability to move into the "new economy" type sectors and see a decrease in exports to bring in fresh money to prop up their own weak currencies, then we could have a 1997 - 1998 collapse all over again. I don't want to be AG since he is faced with real world wide problems in needing to keep them all a float so he must try to keep liquidity high yet he is also faced with John Q Public that has been programmed to buy the dip, chase a stock only because it is going up and thinks nothing of paying 200 years earnings for a sector where you are generally no longer a leader after 20 years and will likely have a blow up in 5. We need a new instrument where you can inject a liquidity into society that is not allowed to go into the stock market or else we NEED a total market collapse to shock people back into reality. Sad but true. The last drop never did get SUNW, CSCO or many other "favorites" to a PEG ratio of one. That means we are rallying now from already over valued levels and I would almost bet that they will get even more ridiculously so before this bubble pops. I don't know when the mania will stop but I still think it will coincide with the Yuppies retiring. I am concerned about the dollar falling and Gold, Oil and many other commodities rising fast the last week. Credit spreads are getting or are already at panic levels. It seems the " Smart Money" knows we are in deep doo doo and yet the stock market is just whistling past the grave yard ignoring reality. Maybe this is a well disguised bear rally and there is still hope but it is looking pretty good so far, like it could go on for a while. We need a really really bad PPI or productivity number this week to try and get a hold on this rally or we could set things up for more damaging drops this fall. I have said all along I didn't think the FOMC would raise rates in June and then would have to in August. With this rally starting so early, I am now getting scared if this scenario proves true since a no hike June FOMC could spur an even more irrational rally before the more realistic numbers get released showing economic disaster looming in July and August. What would the charts look like then? A huge Double top and drop?????? I need to transfer my charts to the site then do some yard work. Good Luck, Lee