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To: George Mc Geary who wrote (19450)	8/22/1998 2:20:00 AM
From: IQBAL LATIF	Respond to of 50167

George-- I think I have raised this issue of consolidation between ranges and 1070 pivot comparing it to 750-990 move with 900 as pivot atleast six times during this volatility- 1055 and 1070 like my any other levels have seen a lot of test yesterday and I am glad to see that these levels of consolidation are responsing the way I would expect- this is a post on 1055 and 1130 range-- To: +J. P. (19292 ) From: +IQBAL LATIF Friday, Aug 14 1998 3:39AM ET Reply # of 19451 J.P.-- I think I have in my previous posts mentioned 1055 and 1130 as channel in which my SPU is going to consolidate, downdrafts can be acute but finally we all just ten years back had no idea of Russian or Chinese economy, behind the iron curtain they were no big consumers of US neither are they now although if any thing else they have atleast China responsible for exporting cheap products like for example 'cycles' to US-- the workers are re-orienting and learning new trades in US investor's which are little up the ladder on quality of production and hi tech. I just cannot make out on paper that what impact China or Russia can have on US economy- once in a while they throw 1.6 trillion $ debt of the emerging market as new threat but all these new emerging markets have assets far in excess of this debt. Gazprom is the world cheapest oil company selling at a extremely generous discount to BP the reason being Russia is considered a risk. China has reserves of 140 billion $ just short of Japan's 200 billion $'s, its currency does not have full convertibility on capital account and most of its domestic deposits are made of small sums which due to population impact does make a substantial sum but as run on currency most of these sums will be decimated by bank charges if transferred back and forth four times by the owners of these funds. In other words these funds are not mobile. We are right now seeing what I call 'manipulation' of markets by short hedge funds- in matter of few days we have seen China, Yen, Russia and George Sorros all descending on the markets as prophets of doom and gloom. It is always succession of news once bear markets are in sight, it is always like this whenever this market dips. I have raised this issue many a time and I will do it again that markets have been trivialized like a circus, you sit in front of CNBC, they need to fill in the production hours and naturally the more they generate hype or pessimism the better it is, it is the tabloid nature of financial journalism that has made markets more vulnerable to volatile movements but undoubtedly the people who believe in fundamentals take time out to think and rationalize. Russia and China or even Japan have all been looking for that inward0 economic growth, in Russia non-collection of taxes is a problem, in China stagnating exports are the problems and in Japan poor domestic demand is behind all these worries, together these markets represent huge number of people and any betterment will only lead to global growth. Russia has started working on this collection of taxes --they need to cut their tax rates to US corporate level- I am supply side economist and think Reagan responsible for what we see now in US. The Chinese are soon going to start that big spending program to revive slackening economy and inward growth an amount of 2.5% of the GDP will be earmarked, naturally Chinese are going to issue bonds and Yuan in my opinion will be in demand. In Japan similarly we have a situation which is inevitably leading to supply side tax cuts permanent in nature, Japan has realized that the only way to get out would be to get these Tax cuts going, fiscal and monetary stimulus lies behind Japan. Now where in this landscape you see deflation, it is all about kicking economies ,jump-starting economies, who is going to benefit from a global demand like China stirring up or Japan or Russia able to collect more taxes. In my opinion it is going to be US corporation and knowing it well no one will be allowed to steal GE for nothing. I would only see these fluctuations as noise and I have always put my money where my mouth is, I will not sell but have always taken advantage of these fluctuations to make monies on down side. The short moves are going to be successful if US fundamentals turn sour in present circumstances it is not the case, every big down move let the shorts looking for first opportunity to cover that in itself results into covering rallies, unlike longs like me who are using downdrafts as protection strategies and making some buck the shorts do not have the luxury of a hedge, they only play one side of the market, a bull can sell calls and has no reason to cover out of the monies calls on index as he is long and will only partially give up his profits like my out of money 1190. 1180 1170 calls on every drop of market have literally become worthless although I have covered them as a policy at 3/4 or 1 but I just wonder whose pocket is paying for all this big run I am having and I have not yet sold a single stock if a small guy like me is hurting them so much what about the big guys my gurus -- similarly bulls also sell ''back to back'' put spreads selling the lower and buying the higher and legging out of long at dip again one hell of a back breaking strategy--in both of these situations we see that the bulls have far more better flexibility to play these markets on both sides. I would imagine even a false close of market below key supports will only lead to big rally- I think if we see it from a different perspective we find that market will eventually after consolidation move higher--- SPU is not a RUT kind of chart- I hope those self styled shorts who compare these two charts will understand that we are and have been in bear market on non-performers for quite some time-- this market takes no prisoners like OXHP and United Health realized...