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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: ajtj99 who wrote (29107)	3/11/2003 11:08:07 AM
From: vampire	Respond to of 30712

It's obviously the PPT <gg>

To: ajtj99 who wrote (29107)	3/11/2003 11:09:17 AM
From: jjstingray	Read Replies (1) \| Respond to of 30712

Hahn, last night - Financially, a cataclysm No, the earth is not going to be destroyed by an asteroid. But, the financial markets are acting like a “virtual asteroid” of some kind is about to shatter their world. This is especially true of the bond market, where interest rates are at Eisenhower era lows. Bond prices are at highs not seen since the LTCM fiasco and the Asian contagion. There may be a financial firm in deep trouble again. Certainly, the source of the financial distress will be connected to a trade gone bad and the use of derivative products. Someone bet wrong on the direction of interest rates and/or the trend in the equity indices. Just like LTCM, the 95% confidence interval was exceeded and the derivatives just blew up. I can show you de facto evidence of extreme stress in the financial markets. The first chart below is the current bond price chart. You can see the prices climbing to new highs over the October highs. This represents a flight to quality and a great deal of fear of “something else”. My point is the current surge in bond prices is the same as the October 1998 peak. The second chart below is from 1998. In October of 1998, the LTCM crisis caused bond prices to rise above anyone's reasonable expectation. The big hedge fund in trouble caused the final surge in bond prices. Do you get my point? There is a large financial institution in deep trouble now, just like there was in 1998. William Poole, Federal Reserve governor, chose today to warn of shocks from firms like FNM and FRE. This was very unusual because his comments hurt the stock market. There must be imminent danger. Warren Buffett is warning of derivative problems somewhere in the reinsurance industry. There is no evidence that Chubb is the problem reinsurance company. However, their price chart indicates serious problems of some kind. . . . . . . I was surprised at how heavy the market was today. Intra day timing projections marked very minor rally attempts. There was a 60 minute timing projection at 2:30 today. The market would have to reverse on the open tomorrow or this projection will be negated. There is still opportunity for significant volatility this week. There is a major 60 minute timing projection for Tuesday at 12:00, that should mark an intra day reversal (see text below). If the market continues to correct into noon tomorrow, it will be quite oversold on an intra day basis, so I'd watch for that. Note, that this would be too early for a significant low. Just temporarily oversold in a continuing downtrend. The daily trend is still down, with a test of the October lows the likely target. Repeated Comments: The next "daily" timing projection is Tuesday March 25, 2003. That date is followed by a projection for April 4, 2003. If the index makes an intermediate low before March 25th, the inflection point will have to come from a 60 minute wave count. The other alternative would be an earlier low that has a positive test on the 25th. It would appear that long positions prior to the 25th, other than scalp trades, will be premature. A subscriber is asking a frequent question: "I am a little unsure what the 'timing projections' are meant to indicate. I have assumed that they are times when, if a significant trend is in place (such as today's downward action), you expect to see a significant counter trend move begin. Therefore I assume at the times listed this week, and especially on Wednesday, we expect to see significant near term lows in the indexes." The 15 minute chart is mostly for volatility patterns and day trading. Minor waves should not be relied upon for major trend changes. The 60 minute chart is more important and more reliable for pinpointing the potential for a counter trend reaction. It's a tougher call when there are four 60 minute timing projections in the same week. It definitely implies volatility. I would say that if we are low into the Wednesday timing projection (even if the market see saws its way there), then a counter trend rally is likely. I don't have to tell you that the more significant the low, the higher the probability of a reversal at that point. But yes, the idea is to look for a reversal from the direction of the current wave.