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

To: Tom Pulley who wrote (83603)	12/31/2002 7:08:40 PM
From: Doug	Respond to of 99985

Tom: If you understand inflation you will understand the stock market. Both require M_O_N_E_Y to raise prices. In the past, Money was found by recycling profits and applying some savings to Buying equities. The Govt and the media have conveniently avoided highlighting the problem faced by the BUYER. Most Investors have huge losses playing with equities and failing to understand valuations. They have lost a lot of MONEY. Instead, the Media are focussed on Corporate profitablity. They do not mention that to estblish that profitability ,the Consumer and Corporate America have to increase their spending. Once again both require MONEY. The Feds have been opening the Money supply (13 rate cuts ). Like in Japan, this has had no effect ; Consumers are not willing to increase their debt risks. The FEDS have little or no influence on the market from this point on. It appears that their survival strategy is to now create wealth by a Tax cut and offshore Oil at $15/barrel. The Tax cut is unrealistic because it will only increase the National debt. The only other option left is to lower the Oil price by influencing offshore supply. I doubt this strategy will hold for long. It has not in the past.! It is therefore more likely that we will continue to see a more realistic lower P/S for stocks and lower trade volumes.