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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: bearshark who wrote (10365)	11/25/1997 9:10:00 AM
From: Defrocked	Read Replies (3) \| Respond to of 94695

This is Great! Incredible! Fantastic! The Nerve! Look at last night's Globex chart. It truly appears the Fed intervened in this equity futures market with a "peg" of the Spot Rate, 946.67. There was a significant buyer there all night. Apparently, the Desk was told "You have $XXX amount of dollars, do not let the futures go below the spot rate."<g> What a great way to covertly add reserves, since the long futures can be settled in cash! By cheaply and stealthily influencing a market barameter, the Fed may have acted in a very efficient manner to reduce precipitous declines today. This action could also have easily been coordinated in the Nikkei 225, FTSE100, and DAX although I have not examined their trading patterns. (The later is even more of a guess) Regarding any "Pact" with Japan relative to US Fed purchases of US Securities sold by MOF, this facility has long been in existence. In fact, almost any financial institution can do a repurchase agreement with the Fed. In essence, one can borrow from the Fed by posting collateral in the form of US Tbond, say, with the Fed. Over the long term the Japanese are good for the money. After all, its our debt to begin with. Now, I for one will consider fading this "intervention" or any quick rise in equities from here. The fundamental problems are still facing the market, IMHO, with high valuations, potentially more Far East bankruptcies, attendant slower economic growth overseas, and in Europe, and slower US GDP growth. From my perspective, the relative odds of gain and safety of return lies in Intermediate US Treasuries, not the stock market over the next six months. BWDIK.