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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Jane4IceCream who wrote (45952)	1/20/2001 5:20:27 PM
From: ~digs	Read Replies (3) \| Respond to of 57584

I personally would be very surprised if the COMPX were to sustain a rally above 3000. I think the resistance there could prove to be too much, resulting in a large double top on the daily. Yes we've broken the downtrend line extending from the beginning of Sept... based on a fed rate cut impetus, but a hard look at the chart shows formidable congestion at or near 3000. For more evidence... look at the COMPX weekly: a large descending triangle is broken and market goes below 3000 in November. 3k is also the breakout point from '99... which I think we can safely mark on our charts as the very beginning of an 'irrationally exuberant' cycle. Isn't it somewhat ironic that Greenspan's famous phrase about rampant investor speculation could not have remained accurate without a continuation of fed induced liquidity into the new year? Rumor has it that this most recent rally has also been helped (at least in part) by these same forces. My guess is that M3 is way up, but I have yet to confirm. Comments from others with a bearish perspective: ----------------------------- The US FED is omnipotent. They are the benevolent father, that fix all ills. Like a parent that bails their wayward offspring out of jail, time after time after time. And with the same corrosive impact on society at large. There is never a price to pay for excess, never a lesson learned. Let me end with a quote from a reuters article today... ``Wall Street is so convinced that Greenspan will bail them out, that they are inclined to take greater risk than they would otherwise,'' says Ray DeVoe, market strategist for Legg Mason. ''The assumption is that in the event of a market panic, Greenspan will cut interest rates or just do something to smooth out the problem.'' DeVoe said he has heard of a ``Plunge Protection Team,'' a sort of fiscal commando unit involving people from the Fed, Treasury, the Comptroller of the Currency and the White House, who would formulate what is needed to prevent a massive selloff in stocks. After the 1987 crash, the Fed reassured Wall Street that it was there to keep the flow of cash going amid the crisis. And in 1998, the central bank cut interest rates to prevent a global run in financial markets amid the Russian debt default and the Asian economic meltdown. Both times, the central bank did the right thing and the market roared back. DeVoe believes that the ``Plunge Protection Team'' probably had a hand in the Fed's surprise decision in January to cut interest rates as the stock market was getting clobbered. ``The fact that the Fed lowered interest rates while the stock market was opened for business looked like a sign of panic,'' he says. ``The economy's soft landing may be developing into a rocky one and they wanted to slow down the momentum.'' The point of my post is, why even bother worrying about anything when the FED is there to always bail the fatcats out? The FED has had one goal during the Greenspan reign, encourage the common man to get in debt up to his eyeballs, and use the proceeds to buy equity lottery tickets. bondtalk.com ------------------------------- Bulls think that Big Al can solve the problem through rate reductions. Too bad that they don't do some homework. He's run out of room. Drop the rates much more and the buck craters, the treasury market becomes a one-way street, and an already (again) wincing bond market just wheezes to a halt. No easy corporate credit equals fast corporate debacle. Uncle Al has, at best, maybe another 1/4 point up his sleeve before he gets drawn and quartered by the bond pit boyz. And about all those foreign holders of U.S. assets,....... not all of them are completely blind and some of them are already quietly getting up before dawn to pack their tents, not wishing to experience "crowded exit syndrome" yet again. It is insane that the sheep see fit to drive the market up even as the economy de-rails, but of such stupidity is bearish opportunity made. Message 15215866 ------------------------------------ a time when rate cuts didn't help the market: services.elliottwave.com ----------------------------------- Above to be taken with a grain or two of salt... just some stuff to think about on a slow Saturday.

To: Jane4IceCream who wrote (45952)	1/20/2001 7:49:31 PM
From: American Spirit	Respond to of 57584

If you have a 6-12 month investment horizon it depends on the amount of risk you want to take. I consider stocks like AAPL, WCOM, LU, INTC very safe as eventually they will show recovery in growth and rise accordingly. No reason why they can't double. If you want to play it safer I'd invest in VZ or some other blue chip in whatever sector you like. If you want to go the multiple returns by very volatile stocks I'd pick rat dogs on dips (not after they just doubled), my prime example being SCNT. Study the sectors and their expected/potential growth. Bottomline, no one knows but go with your strongest hunches.