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


To: Crimson Ghost who wrote (83832)5/11/2003 10:15:44 AM
From: William  Read Replies (1) | Respond to of 99985
 
Doesn't Fed routinely buy and sell bonds in open market?



To: Crimson Ghost who wrote (83832)5/12/2003 3:31:41 AM
From: Psycho-Social  Respond to of 99985
 
That could be, but I've spent some time looking at the correlation between stock and TBill Markets. There have been plenty of times that both have moved in the same direction. I do believe that, historically, the Bond Market tends to lead the Stock Market in anticipation of major cyclical changes in the economy. Look at the period from 1981 thru 1993, and you'll see how the Long T Bonds and the Stock Market moved in tandem, with the Bond side leading a bit.