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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Webster Groves who wrote (79552)	6/16/2002 5:25:10 AM
From: Psycho-Social	Respond to of 99280

The Fear Factor: In an attempt to quantify the relationship between news re terrorism and Market fluctuations, I've created and am testing a new indicator called The Fear Factor. So far (over about 3wks) there seems to be a contrarian relationship, i.e. as the news flow gets more negative and more frequent re the threat of domestic terrorism the Market goes lower and lower. The contrarian nature implies that it could become a positive force in one of two ways: If the intensity of terror warnings decreases; or If the focus shifts from dire warnings of how vulnerable we still are, to credible, effective steps that are being taken to make us safer. There is a potential for this second type of improvement to occur if the various political players can work cooperatively to pass anti-terrorism measures, but it's difficult to say if they will do so in the period immediately ahead. Ironically, the two most recent worrisome incidents can be viewed as evidence of Al Queda's decreased effectiveness. A guy seen as trying to create a dirty bomb has no explosives, no radioactive materials and no known supporters in the U.S. A bomb explosion in Karachi that does not kill a single U.S. citizen. I'm expecting that eventually, hopefully sooner rather than later, more of news will focus on constructive measures being taken to stop terrorism. I'm not expecting it'll be positive on balance, just that the flow will become less heavily weighted on the negative side. That will allow the Market to rise.