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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (16092)	1/2/1998 3:54:00 PM
From: saulmon	Read Replies (1) \| Respond to of 50167

Iqbal, please give me your opinion on WDC short term.

To: IQBAL LATIF who wrote (16092)	1/3/1998 12:01:00 AM
From: IQBAL LATIF	Respond to of 50167

Inventories increase was one issue that prompted the initial weakness of the market- otherwise the number was lower than expectations but higher than 50 does indicate an expanding economy PP and deliveries both were lower in my note I expected PP to be lower but deliveries around 56- this is a definitive slow down of fast pace growth and indicate a non-inflationary growth with inbuilt mechanisms which has resulted in first very visible signs of slow down in what so far was termed as non-sustainable growth. It is once again difficult for doomsdayers to rationalise these new configuration coincident indicator is pointing towards a solid growth of GDP at 4% however NAPM is indicative of slow down now together as I said we did see a initial quicktest of 974 on SPA within first hour we did not really see 972 or 968 but market as I expected got confused with 'deflation' issue realised that number is not indicative of any such problems and came back up to make a close above 982 which I think is a clear signal to a assault on 992 and 1000. My SOX level of 275 was reached I was thinking that 280 will be probed withion 10 sessions this is a satisfactory move from the lows and good reversal, I would be now concentrating to work on pointing visible signs to see where SOX is heading and should we expect 301 or not. On bonds I was anticipating a weakness which so far has not matrialised a full one point movement yesterday has taken bonds to yield 5,87%. I think we have now based on bond yields and strength of economy a good combo to check for new highs and break them. I would look for JPN to stay above 15000 and other ASEAN markets to take a cue from US- I expect JPN to cross 16200 as first sign of getting out of woods- I am sure we are going to see it soon - Japanese banks on one hand are having problems with Nekkei valuations but on the other are now sitting on huge capital gains on bond holdings, they have a kind of good hedge against falling asset prices in Japan they own upto 400 billion $ worht of bonds and also run huge leverage positions in bonds- come deregulation and you may find lot of Japanese money escaping to US treasury- for last few months errorneous statements have been made on intended Japanese sell off and now with benefit of hindsight we can all see that Japanese never sold their US treasuries and moaning about US paper being sold was nothing but another mistake on long list of errors. We are right now sitting on a good combination of macro and possibility of great corporate profits, anticpation may lead market higher and I think we may see the predictions of 1050 on SPA come true soon, a break of 1000 will be as difficult a task as I wrote earlier like break of 1000 on DOW but move upto 1200 was swift- although excessive 20% but such is pain of running short on key pshycological barriers- I will not run on these levels a short- although reward is highest on resistance butr if resistance is taken out pain is greatest too. Next week test of old highs and based on ASEAN movement a move up. I will write a separate commentary on mumbers and how I intend to play coming numbers. The art I think is to define one's strategy, reasons of strategy, and game plan and important points I try my best to incorporate within fluidity and dynamics of markets a well defined strategy and clear indication of overhead levels of resistance and supports it is only with this clear game plan I have learn to make my trades in this market. I hope we will be able to continue this tradition of approach for years to come. Defining a strategy for a good investor is half battle won.One can be wrong but resolve should be to go in market with a game plan day in day out, that is what distinguishes markets from casinos.

To: IQBAL LATIF who wrote (16092)	1/3/1998 8:44:00 PM
From: Philip H. Lee	Read Replies (2) \| Respond to of 50167

>Numbers may bring relief rally if market realises that 'deflation' is definitely out of equation this may take SPA to 984 and higher to test old highs.< January is typically the strongest month for fund inflows, and I expect to see strong inflows again for Jan98. Combine that with low interest rates, low inflation, and a tangible January effect, and we should have a good month. There's some concern about Asian weakness being reflected in mid-January earnings reports. The effect of the Asian mess can be more accurately quantified at that time, and my hunch is that the markets have discounted a good portion already. Actually, the overall effect of the Asian crisis is mitigated by the fact that US companies who manufacture in Asia or get materials from Asia will benefit. I don't view deflation as much a threat as I did before. If we do see signs of deflation, I think Greenspan will lower interest rates to boost the economy. This would also help weaken the dollar and curb import-related deflation. Philip