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

To: IQBAL LATIF who wrote (19090)	7/29/1998 8:36:00 PM
From: James Strauss	Read Replies (2) \| Respond to of 50167

The Market... IQBAL: Excellent Post!!! There are two things that stand out for me... 1. Hidden behind the market Run Up to new highs was the fact that more stocks were Declining than Advancing... 2. The FED can't lower rates now (as they should), without causing currencies around the world to plummet, especially the Yen... So we have a situation where Alan Greenspan fakes concern about possible inflation to cool down the markets and to misdirect our attention from the real need for a FED interest rate cut... The fallout: 1. The economy doesn't get the stimulus of lower interest rates that it needs... 2. The IBM's, MSFT's, DELL's, etc., can't keep carrying the whole market... There is a limit to how high a multiple even the most zealous investors will accept before taking their money off the table... 3. $401K money will be shifted from equities to money markets... This will take the fuel away from the market price rise masked by the few big caps... 4. Market momentum will reverse as those with profits in the big caps sell to protect their profits... 5. A continuation of the correction or BEAR Market darkens our investing horizons... The key to all this right now is the FED cover up by turning attention away from the real need for a FED rate cut... Jim

To: IQBAL LATIF who wrote (19090)	8/1/1998 2:35:00 PM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

It was anti climax to what was a good finish on Thursday-- I thought that we will see a run up to 1155 the level I think is important if this market has to move higher-- despite of some good numbers we saw a test of 1118 on SPU-- I think we have been very much highlighting this particular level atleast 7 times in last one week posts- -I mentioned this as a most important support- if this support is taken out I will be more biased towards the test of pivot during this phase of consolidation, however I would remain very nimble with CLX and MCI kind of eranings and Oils, Semis, Disk Drive makers, Commodities Health care, HMO'S, Papers, all languishing. For me BOeing and MO are the best two companies to own for next few years-- to short them will be at one's own peril. I just will reiterate that if even DJIA sells the money will look for other sectors-- their is no other place one can park his money other than the market -- emerging markets are out- Europe is attractive but US huge apetite for equities does not have ground infrastructure to lead this money into Europe and still groos profits in Europe are only 40% of gross profits of US fortune 500. Japan is greatest buy but it will only attract money above 22000-- that is how FM like to play the blind game of herd. In the end some one with a billion to invest will only find good companies with compounded reinvested profits as good investments. I expected this to happen- post 19086-- ''We opened higher and now are testing this 1128-29 area on SPX or the critical support of 1135-36 area on SPU- I think that we are going to test that 1118 area before any move up can be expected. In longer term now that RUT is languishing we may if some more destasbilising news hit the market can have a serious downdraft a quick one. I am seeing that we are on composite at 1892- I would think that in case we break this support and have close below 1118 on SPX we go down and test 1103 area, this can exceed to as low as 1076 on SPX-- which in DOW terms would translate to my level of initially 8806 ( we did go there yesterday but rebounded from 8816).'' Now we have this test of 1118 it was very quick as lot of stops were taken out- however we also saw some weakening in SOX after being up there for most of the time at 262 closed down at 255 a support-- right now I see SOX at a support, composite at around 1865 my area which I thought will reach with 1118 and DOW second test of 8816 (8806) in last four days, a case is being made that all this selling is harbinger of a major set back, in my opinion in a bull market I am still strongly convinced that all the parameters so far remain intact--in a bear market like 72-74 advance/decline line had different interpretation (it should be-as conditions were diffrent) in present bull market I see cluster NHNL and ADL showing me absolutely different configuration. Since 3rd Jan 1994 whenever we have these red clusters of NL's against NH's these have inevitably led to a new phase of a long upward leg-- the fundamental change will only come if we get into a economy which is sharply slowing down and we see fears of overcapacity and lack of consumer spending-- it is normal to find a point and that is 1070 around which this present leg will hold its pivot-- like we had the first major leg of this bull market from 750 to 990 with a pivot of 900, markets are not rockets last weel I wrote that my objective are 2050 on composite and 1220-1230 on S&P we were almost there and I think this is a good consolidation. I would think that we are range bound and have still not squared my naked calls of 1200 and 1190, reason being until 1155 is taken out we don't have a direction we may move between 1103 and 1115. Most of the indicators are showing that we are ready for a move up in oversold areas, if economy remains strong RUT cannot languish at this place.