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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (12949)	4/30/2004 1:52:48 PM
From: ild	Read Replies (2) \| Respond to of 110194

From Don Hays: Yesterday’s brief update showcased the fact that the 21-day oscillator had finally dropped to the -5000 level, and that as soon as the downside momentum was stopped, we would be putting that last 5% of that 20% cash we had pulled out of the market back to work. I would suspect that to occur momentarily. Yesterday put another “wiggle” indicator in a favorable condition as the put/call ratio moved above 100%. The very low level of the 10-day Arms index moved back into neutral condition as well. On January 20, 2004, our indicators were telling us it was a time for a “changing of the guard.” In other words, the first portion of the psychological evolution, the part that moves emotions from “depression-and-despondency” up to “hope-and-relief” produces easy and dynamic gains. So far, from the low to the high of this move--that produced this emotional response--you see the S&P 500 up 51.4%. But then, based on past “evolutions,” you have to go through a “changing of the guard.” Analysis all of a sudden changes from that when investors love bad news, because it keeps the Fed from raising interest rates, sends bond yields down, and precipitates fed fund rate cuts. Now, good news begins to evolve, and investors are not quite yet conditioned for it. Good News is bad news, so quite often as the economic conditions evolve, the prior sudden rush of price acceleration waffles as good news produces Fed and inflation fears. Finally the conditioning takes over, as earnings continue to move up, and when the sky does not really fall, then good news is interpreted as good news. Then the “hope-and-relief” breaks out to excitement, thrill and sometimes outright “euphoria.” January 20, 2004 marked the beginning of that entrance into the mid-way zone. We now are about halfway through that “waffling” phase, and you can read it all over the horizon. The market was super overbought on January 20, 2004. Gold was hot, copper was hot, and the dollar was in the dog house. Now, we’re also putting a lid on the “favorable” November to April seasonal period. Putting all this together, we believe that the market has a few more months—probably three—in this “mid-point” of the evolution cycle, but by August 1st, we are expecting the next phase, the break-out, the time when the good earnings will be cheered. Markets do the best in the first and the third of these three zones. In that last (third) zone, the headlines turn cheerful, and the market sucks in all that “easy” money that has been shivering in the bomb shelter. There is now $4.8 trillion parked in the bomb shelter receiving interest payments LESS than even today’s mundane inflation rate. A lot of lemmings will be trying to get in the door—all at the same time. So our purpose is to use this period to position new purchases, while it is SO.O.O.O.O.O easy to get in that door. Our “wiggle” indicators are telling us the next few days are the time to pick up those easy candidates that are being shoved at any willing buyers.

To: gregor_us who wrote (12949)	4/30/2004 1:58:08 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

<your plan to stimulate the real economy with an emergency-level interest rate is not working.> Not only not working, but toxic. As I've been saying, based on crack-pot bogus theories, put in place by sycophants, political/financial institution hacks, and yes men, and certainly not real central bankers. <think you want to see the cultural desire for consumption, here in the US, duly whacked, thwacked, and attacked.> I have an innate American culture desire to consume too, I just like to pay for it, hence my 800 FICO. <And no one dares "call the loan"> Then pick your poison, and get ready for more very destabilizing inflation. <BOJ is the Co-Enabler of the F3IP?> Yes, and missing in action this month. Message 20078529