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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (55529)	10/15/1998 2:07:00 PM
From: Trey McAtee	Read Replies (4) \| Respond to of 58727

LG-- i know you guys are heavily into the TA, but for me right now it doesnt seem to be as predictive as it was in the past. we are still seeing lots of arb work going on to maintain certain levels, and we simply do not have enough money to fight these people. one thing keeps sticking in my mind. bottom line, this rally is predicated on a rate cut, a big one. to a lesser extent, it also needs a bailout of brazil. one of the things propping us up today has been talk of a 100-150 billion$ bailout of brazil. i dont see from where the money is going to come. that however is not the big issue i am looking at...let me get back to this rate cut. the positive earnings we have been seeing, especially in tech, are seasonal, and they arent that great when compared with same period last year. but, if we get a rate cut we can sustain the rally even in the face of declining fundamentals. now, part of the problem recently has been a very real lack of liquidity. the fed as been steadily over the last month adding liquidity. this is inflationary (its basically a rate cut without the meeting). it means that it is going to be difficult going forward to cut rates when the dollar is already so low compared to the yen. additionally, i dont think anyone is really looking at how much damage a strong yen will do not only to japan, but to the rest of asia which has to pay back loans in an appreciating yen. THEN you get to add in the effects of repatriation from the US which the japanese government may mandate. yes, a weaker dollar will likely help US exporters, but not US consumers who have been driving the economy.it also makes a rate cut damn near impossible for a fed that is obsessed with inflation. what i see happening may be good for the very short term, but in the intermediate it could make things VERY difficult. it seems to me that we are now borrowing not to prop up the government, but instead the market. has anyone else noticed the obnoxious login dialog that pops up when you want to post? good luck to all, trey