To: IQBAL LATIF who wrote (20926 ) 10/20/1998 8:27:00 AM From: IQBAL LATIF Respond to
Today is the day Macdonald, Warner Lambert have buried the deflation talks but if WFC IBM MSFT TXN deliver the right message we will soon move up to consolidate this channel of 8400 and 8700, to be honest I would think that looking at composite if we take out 1755 on two closing basis and markets knowing that banking system is strong enough to withstand the extremes imposed on it by the worst kind of leverage we can based on lower interest rates and potential of further rate cuts move very high-- we are 22% below the composite highs most of the earnings are beating street as we expected todays earning post close will probably settle the debate one way, we may quickly move up to 1680 and than to 1755 the major resistance if 10,000 is taken out on DJIA, I would like to think that .75% cut added on with current earnings provide a massive impetus to the market, if today goes well we are looking at huge rally until Friday taking out the major resistances on composite and DJIA--- even if we have bad earnings we may see a test of 1025 area on SPZ and money will flow in big time as the potential of present weakeness of $ and lower interest rates is not fully prized in the market, it was not that world was falling apart from burdens of overcapacity or dropping prices it was a manipulated yield curve, the positions were so overwhelmingly lopsided that traders wanted to extract the last blood from speculators.. The 'leverage' and hedge funds excesses were behind most of this punishment handed out to ASEA and global markets, now if we had this deflationary scenario rightly interpreted why MAC and others are beating the street? Was market not prized for closeouts? If instead of closeouts we see demand going up and inflation threats or rising prices visible on the screen, will initially all that strength not lead to big moves up.. In my opinion we had this extreme movements in last few weeks, it is now the time for corporates to deliver- if these corporate deliver tonight we may be seeing ourselve on verge of a big rally the worst of the problem is that even if they fail to deliver the prospects have so daramatically changed that with a test of 1500 and 1018 or even 1000 we go higher--- the excesses are committed by the market up and down like 1320 was an excess on downside using same analogy I would think that market is ready to commit a adulturous assault and deflower the virgin territory of 10000 the magic number-- it will be soon on us like a thief in the night..I know it would be excessive but market is one hell of specualtive place they do it both ways- it is only the clever people who buy at dips like Dell Noka and IBM at 44 60 118's levels I just don't think we will not see excesses on upside too.. I have tight levels -- a break of 1080 takes us to 1130 a consequent break of 1130 will lead us to 1200 which will correspond to that deflowering attempt to scale the unthinkable 10,000 - far but I think it is achieveable.
