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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (9559)	12/9/2001 10:14:53 AM
From: robert b furman	Read Replies (1) \| Respond to of 19219

Hi Dave, For one thing better than me.gggg I think the best profits were made when positions were taken in 2000 bofore the rate cut started Jan 16 of 2001. These would be long term capital gains - not on the coupon rate but on the face value appreciation of the bond. I'm by no means an expertt here,but it does look like bonds peaked in the last month right after the last 1/2 point cut. The money to be secured is not from the low rate ,but rather from the appreciation of the face bvalue of the bond. I've never played them as I always thought the return was poor.Next time I'll park some of my money into bonds with the hope of the capital gains aspect. I think some very smart people do this with gains taken out of a market top. It's a pretty safe bet that AG will increase rates when he think the economy is overheated - just as surely as he'll lower rates as the economy declines and cools off. This bond in and out action requires good timing.It also must be pointed out that the dollars involved in the bond pits are huge. So only a few of the players have toget it right and it still is a formidable wave of money.I think it is perhaps a game of the truly rich and old money crowd. Very little is said about it - but it has a powerful effect upon equities during seachange - which is what I think we're observing now. This rally has been doubted as just another false rally like last April. Well this rally is establishing a pretty good pedigree.Teh Naz 200 day moving average both simple and exponential was taken out without a set back.Now the S&P and the DOW are right on the verge and we see resistance.This resistance has many doubters with a .70 put to call ratio and still what is record short interest. The shorts are the fuel that will propel the indices over the 200 day moving average.The number of stocks in the NYSE over their 200 day moving average is 53 and climbing daily. IBD's mutual fund index is just below the 200 day moving average also.I think that cheap money withit's poor returns is forcing some well heeled investors to go out on the risk curve(equities).The bond market topping out is also adding to the fire.The most power to be yet diplayed will be the shorts covering all at once when these moving averages are surpassed. Just as quick as this economy turned down - so too could the economy revive.I for one never saw this as a recession but rather that of an inventory selloff.The 9/11 admittedly turned it into a recession and that was also the capitulation that marked the turn and end of the bear. JMHO on allof the above.This is not a good time to be short.Smart players short the top not the bottom.Any gains to be made from the short side from here - just don't justify the exposure. This is a time to be working into longs.As the market morphs into a bull it will be time to ADD TO.I ADD TO very lightly - most aggressive at first and lighten up all the way until I sell. There are some smart people out there and I think they see this bear getting old at the tooth. Bob