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

To: Chispas who wrote (77674)	5/31/2001 8:51:24 AM
From: t2	Read Replies (1) \| Respond to of 99985

So, now it's clear. Greenspan's game plan is to get stock prices up so that people feel rich and will start spending again. I think there is some truth to that. That is why I feel he will do everything he can to ensure that the Nasdaq does not tank below 2000 towards the lows of early April. He wants the economy to stabilize and then recover ASAP. His real enemy had been the fact that bond yields were going up while he was cutting. If the yields keep going down as they had for a couple of days, he will likely stick with a 50bps cut at the June meeting. This will also make money market returns less attractive and funds would get shifted to safer dividend paying stocks with low PEs...of course it then has a chain reaction all the way to the highest PE stocks. With an aggressive rate cut plan, there will be a tendency to start putting the cash to work before the rates go down further...it becomes a bit of a race to use some of that cash...and that means the market moves up faster than people expect. imho. We know there is a lot of cash out and it has been increasing lately. there.http://www.thestreet.com/metrics/sentimentsignposts/1441356.html