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

To: Gary Burton who wrote (61883)	11/5/2000 9:08:12 AM
From: Zeev Hed	Respond to of 99985

Gary, I think that initially, you may see selective rallies in some sectors like the drugs and possibly the financials. The social security scheme actually guarantee to the financials that they will have a pork barrel of $1 trillion to share between them over the next five years. The initial perception will be availability of excess liquidity to the tune of a $100 B/year starting maybe in 2002. Oil is supposed to rally, but frankly, those people are already seeing the "writing on the walls", I do not think they will. Last, I do not think that AG will do any additional tightening (he has to walk the fine line between precipitating a recession and countering future fiscal irresponsibility) before the end of the year. However, after the "State of the Union" (and probably a little before that, when it becomes clear what a Bush presidency may or may not do), even if AG does nothing, the realization that he will have to implement a restrictive monetary policy to counter the coming fiscal relaxation may throw the market into a big loop. Thus the scenario's timing, rallying even after the election (independently of who wins), decline early into December induced by a combination of tax selling and partial realization of the markets that the tide may be shifting, followed by seasonal strength toward the end of the year, and weakness starting prior to the State of the Union, since anticipation and discounting will start and set in. Will it work this way? Who knows, there might be exogenous effects and of course misreading of this map that will influence this time table. Zeev