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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: PaulM who wrote (57675)	8/29/2000 10:37:36 PM
From: Rarebird	Read Replies (1) \| Respond to of 116753

Hi Paul! The Bears are looking for a large drop in the NASDAQ here, though that's not how I suspect it will shape up. In fact, with worries about higher rates after the election, and Oil prices remaining firm, some of the techs reduced-sensitivity with respect to energy and rates, might actually help both the Nasdaq 100 (NDX) and Semicondutor Index (SOX) to hold higher level supports here. Technically, as the equity market breaks out of resistance, odds will favor pullbacks only to the breakout point; which is how I think you'll see the minor September pullback before the Market heads to New Highs. And don't forget that so many fund managers have had a miserable year thus far and need to offset their miserable work with some heavy duty buying in October. Contrary to much thinking, the financials (particularly the banks) do better in low-interest environments, not high rates. Anyone who thinks otherwise probably thinks that Oil companies would do better with $40/bbl. oil, which they would not. Long-term higher oil becomes self-defeating, because it assists contracting demand, and therefore while generating a brief spate of higher oil company profits, actually sows the seeds of lower earnings down the road. It is absurd IMO to hear certain analysts talking about buying oil stocks now, after two years of advances. Higher Oil would be self-defeating and immediately hit demand in several areas that remain energy-intensive, so I would not assume that higher Oil equates to reasons to chase oil equities at these high levels; quite the contrary actually. To be sure, Higher Oil Prices increases Stagflation risks, but some deferred spending on a host of big-ticket items is offsetting some of that for the time being. The Bottom Line here is: "When the cat is away, the mice will play." Greenspan is on hold till the Election. Get ready for some more "irrational exuberance" in the interim(after a mild pull back to 1500 on the S&P). PS The best news for Gold over the Intermediate Term would be if Greenspan destroyed the Party with a 50 basis point hike after the election. That would increase the likelihood of a "hard landing" and I would then load up on Gold Stocks for a Bull Market in 2001.