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To: Ron McKinnon who wrote (16054)	8/30/1998 4:20:00 PM
From: pz	Read Replies (3) \| Respond to of 53068

Chat Patrick Patrick, Post them here is you'd like or private mail them to me. Either way is fine. Paul

To: Ron McKinnon who wrote (16054)	8/30/1998 4:30:00 PM
From: pz	Read Replies (2) \| Respond to of 53068

Just an observation I had a friend killed in a freak highway accident yesterday and his wife and kids were injured. It's so easy to get caught up in work or the market and not stop to smell the roses, or tell a family member how much you love them. Don't take any day for granted, because it might very well be your last. Living today to it's fullest..... Paul

To: Ron McKinnon who wrote (16054)	8/30/1998 7:43:00 PM
From: DanZ	Respond to of 53068

Ramblings. Dollar: The value of the dollar has been falling against major foreign currencies the past few days and it's down again so far this evening. The dollar is trading at 140.81 yen, down from about 147 a couple of weeks ago. The most dramatic move is against the Swiss franc. The franc is currently trading at .7008 dollars, up from .6962 on Friday and .65 a few days ago. That's an 8% move--quite a lot in a short period of time. Interest rates: The yield curve is slightly inverted for the first time in many years. Inverted yield curves almost always precede a recession and I think the federal reserve will try to stave it off. At a minimum, I think they will lower the fed funds rate and possibly the discount rate. The discount rate is currently at 5% and got as low as 3% in 1992 and 1993. The fed funds rate is currently at 5.5% and also got to 3% in 1992 and 1993. The 90 day, 180 day, 1 year, 2 year, 3 year, and 5 year rates are all below the discount rate. The shape of the curve is really strange right now, with 20 year rates higher than 30 year rates because of the flight to quality into the 30 year bond. stockresearch.com When you add up the decline in the dollar, the odd shape of the yield curve, and a declining stock market, I think the fed will reduce the fed funds rate and possibly the discount rate. There's no inflation to speak of, and the price of oil, which we all know is at a multi-year low, makes up a big part of the CRB index. There is certainly room for the fed to ease and it might help firm up the stock market and reduce the threat of a recession. If the fed doesn't take any action to keep the stock market from going into a free fall, there's no doubt in my mind that a recession will follow in a few months. Yes the unemployment rate is low, but people will reduce spending if they feel significantly poorer and are worried about the future. A big decline in the stock market is the only fundmamental reason that I can come up with for a recession in the U.S. I think the market will rally given the turn in the dollar and likelihood of fed easing, but like you, I'm fearful that it will be met with aggressive selling. I would look at the following things to guess if the market will sustain a rally. 1.) Increasing volume on rallies 2.) Declining volume on pullbacks 3.) Not taking out the previous low when the market pulls back. The numbers to watch are 1021 on the S&P 500 futures, 8010 on the DJIA, and 504 on the OEX. If these lows are taken out, then the new low (whatever it is) would become the benchmark when the market rallies again.

To: Ron McKinnon who wrote (16054)	8/30/1998 11:25:00 PM
From: John K. Culley	Respond to of 53068

Ron: A healthy respect for the markets ability to fleese the individual investor/trader is rule #1 in capital preservation. Wisdom of the ages is also beneficial. I don't purport to be market wise, but like yourself, I'm scared sh**less too of the head fake. The first shift commander uttered these words at the close of each morning briefing on "Hill Street Blues"...words we should all live by: "as they used to say on that old cop show (forget which one) "You be careful out there" Regards, Jack