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


To: Tommaso who wrote (17130)4/23/1998 8:47:00 PM
From: bearshark  Respond to of 94695
 
Tommaso: Under Edson Gould's "Three-Step-and-Stumble Rule", whenever the discount rate, federal funds rate, or margin requirement is increased three times in succession, the investor should beware because the stock market, usually with some delay, will suffer a sizable and sometimes severe setback.

The most recent step occurred on March 25, 1997 when the Fed raised the federal funds rate from 5 1/4 to 5 1/2. Two more are needed to fulfill the rule.