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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ditchdigger who wrote (25317)	6/11/2001 6:02:31 PM
From: Sergio H	Read Replies (3) \| Respond to of 29382

Ditch, I also like NCI's chart. Some reading material for your lakeside enjoyment. Good explanation on volatility from Rabbitt's Analytics: <The Federal Reserve is pumping liquidity into the system. Additionally, money market cash is at record highs. Our S&P 500 forecast regression model based on monetary factors stands at a two year high. We project a 17% return in the S&P 500 in twelve months. This week we will be a full week for economic releases. Weak data is expected. However, the unseen benefit in the news may be added incentive for the Fed to cut rates more than 25 basis points when it meets in two weeks. The releases will include April business inventories, May retail sales, producer and consumer price index, capacity utilization, and industrial production. Adding to the deluge of data will be earnings pre-announcements for the second quarter. They are expected to continue in their free fall, particularly in the technology sector. The probability of a dramatic stock market move is very high. Volatility, which comes in waves, has declined recently. Stocks are extremely compressed like a “jack-in-the-box”. When an economy is transitioning between high growth and recession, or from slow growth to recovery, there is a gray zone when a “see-saw” battle between the anticipated new economy and the fear of the old economic environment alternatively capture investor psyche. This is a transitioning market, which has had no momentum since January. The lack of volatility is because many aspects of stocks are “mean-reversing”. Prices move up, then correct, and then trade up again. The criteria for choosing a stock is flipping rapidly as value and risk-aversion styles fade slightly and growth and momentum styles re-emerge. Many investors have been jumping into growth-associated issues on expectation that growth will resume soon, but profits are rapidly declining. Value/Growth leadership has been flipping every 30 days. Economically sensitive vs. recession-proof stocks have been exchanging leadership. The result is internal churning with little overall movement.>