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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (4528)	1/1/1998 1:31:00 PM
From: Chris	Read Replies (3) \| Respond to of 42787

that post was from briefing.com... i have no crystal ball <ggg> (like you do)

To: GROUND ZERO™ who wrote (4528)	1/1/1998 5:07:00 PM
From: Robert Graham	Read Replies (2) \| Respond to of 42787

One possibility that can explain the low bond rates is that is where the institutions and other investors have placed their money during the market correction. In that period of time, there were times that bond market was rallying while the stock market was moving down. If this is true, then the flattening of the yield curve may be a temporary phenomena that will disappear when the stock market starts another rally. When this happens, you should see the bond market go through a correction. Unless something in the market has changed recently that I am unaware of, I personally do not see the market going anywhere in the near future. I think what we have witnessed is a continuation of the market fluctuations that we have seen before in its wide trading range. The Dow usually stalls at about 8015, and three times it went above 8100 to come back down below 8000. Until the institutions and other investors that have been standing on the sidelines start to move their money back into the market, I do not think there will be any sustainable rally. In order for this to happen, there needs to be a further shift in market sentiment. Also, there needs to be a market leader, which may be the techs, or other sector, like perhaps the retail sector which has been leading the market in many cases. For now, I would watch both the NASDAQ and bond market in relation to the DJIA. As a secondary broad market indicator, it may be worthwhile to watch the DJUA and DJTA in relationship to the DJIA. Lately, if I am not mistaken, both of these averages have been hiting new highs in the past while the market as represented by DJIA and NASDAQ have been going through their consolidation. The DJTA moved up on the intiial leg of the DJIA correction to then fall in line with the DJIA, but still is showing good relative strength in relationship to the DJIA. The DJUA has continued to make new highs. My thoughts are that the relative strength of both indices are due to low interest rates, low oil prices, low inflation, and the generally good economy that has sustained much business activity and alsogenerated discretionary income by the consumer. More importantly, the DJUA is a good indicator of one of the defensive groups, the utilities, which includes many preferred stocks that investors have been fleeing to during this market correction. Also, the DJTA acording to Dow Theory must confirm any trend set by the DJIA. Anyone here an expert on "Dow Theory"? The current market picture can change. The following are some thoguhts on this matter. The Asian crisis along with the strengthening dollar and their potential impact on our economy has helped in keeping the Fed from tightening up on the money supply. I do see allot of pent up buying interest at least by the speculators and even by some of the bigger money. The institutions have become much more competative and performance mnided over time and more short term in their approach to the markets than they used to be, particularily in the latter stages of this speculative bull market. It is also apparent to me that the average investor sees the economy intact even though there are fears by some of the econom slowing to some degree. Some do thinkthat the market is due for a larger correction due to concerns more to do with overvaluation than any funcamental issues. Many are just wondering not "if", but "when" the next bull run of the market will happen. When the money moves back into the stock market and the blue chips, this can cause periods where both the bond market and the DJUA can drop. When this happens, look next to the DJTA to confirm the DJIA on its new bull run. Any comments? Bob Graham