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Strategies & Market Trends : The 56 Point TA; Charts With an Attitude -- Ignore unavailable to you. Want to Upgrade?

To: Doug R who wrote (6835)	10/31/1997 1:47:00 PM
From: Zeev Hed	Respond to of 79449

I like your last paragraph most. As for Greenspan, I d not think he is going to lower rates (unless we get a sudden decline in the markets which could spread to main street). You are absolutely right that both Greenspan and Clinton (and Congress) are playing with fire. Both have in place a restrictive policies. There is a real chance that next year we will actually have a budbet surplus (I would not be surprised if the quarter ending in December will be a surplus quarter), thus the fiscal policy is restrictive. Interest rates should be no more tha 2.5 to 3.5% above the inflation rate that gets us down to at least 5.5% on the long term bond. Yet, I do not see Greenspan lowering and the reason, IMO, he does not want to find himself in the shoes of the BOJ where they have lost the tool of long term interest rates as an economy stimulating device. Greenspan wants to make sure that if needed, he has ample ammunition (lower rates to real required rates) and not be already at low interest rates when a financial accident occurs. That by the way, tells me that Greenspan fear is that the market will ballon too much, and I think he is very happy with the 10% rest the arket have taken, particulalrly since it appears that no spiral down ihas been created. However, I see from here on a chinese torture markets, in which we go down slowly but surely, and this opinion I am not ready to change unless we see 7600 taken out with gutso. So, right now, label me a short term bear. Zeev