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Strategies & Market Trends : January Effect 2003 -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (302)	4/8/2003 11:07:35 AM
From: Londo	Respond to of 666

The Saddam news brought the futures up to 885.50, but that's about it. I'll contend that Saddam was taken out on the first day of the bombing, but now they're just looking for a better excuse to give the perception to people that he's dead. But perception is all that matters anyway.. but they'll never be able to "verify" that. Remember after 9/11 about the Anthrax scares? I remember after the first scare, the markets went down about 3% or so on fears that it could be a larger bioterrorist plot. The second Anthrax scare was good enough to jolt the market 1% or so.. but the third and subsequent Anthrax scares the market didn't even pay attention to... this is what all of this Saddam news reminds me of - the first bit was good enough to jolt the futures 20 points, today was good for 6-7 points, and subsequent days? Probably will be met with selling. Another bearish indication for the S&P is that although the index is flat for the day, implied volatility (VIX) is down roughly 1%, which suggests that investors are complacently buying the OEX in anticipation of a surge up - this to me is a bearish sign that we're going to see the markets head lower.. I'm looking for an S&P of about 830-840, Euro of 1.09, 30-Year of about 114... and that's the first leg down before the next 'mini-short squeeze' takes out the complacent shorts, and then resumes its downtrend to.. you guessed it, the October lows of 770. It all depends on inflation (the American economy needs some), and the general economy.. basically if the Japan scenario is the operative one, we are headed for the same fate. Although our banking system is infinitely in better shape, if businesses don't have the capability to raise prices, profits will stink. And without profits, stocks are not worth investing in. (although as a consumer, this is temporarily a good thing).

To: RockyBalboa who wrote (302)	4/8/2003 1:48:41 PM
From: Londo	Read Replies (1) \| Respond to of 666

The bonds lead. The 30-Year is up nearly a point today, while the S&P futures are up 3 points, but it's pretty clear that demand is rotating into the bonds.. what's keeping equity prices higher? Not sure yet, but suspect that it will be tough for equity prices to continue to remain this way unless if more cash is going into the stock market. Who knows? Euro is up 0.004, while volatility on the OEX is down a whole 2%, down to 29.7%... the OEX might make for a good short via going long puts simply due to the fact that the equities are exhibiting complacent buying. Maybe there's more anticipation in Iraq, but the upside appears to be exhausted.