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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: genaro who wrote (285)	12/4/1998 9:59:00 AM
From: Terry Whitman	Respond to of 99985

<<What is your take on the up coming election and market direction? As I am sure you know, most pre election years trend up, historically. The elected prefer the beer and whiskey affect leaving the killer on the road.>> Trying to predict political moves is even tougher than trying to figure out market moves. Then trying to figure out the effect of political moves on the market adds a whole 'nuther variable to the equation. Way too complex for my limited brainpower. The best guess though, is that politicians will continue to repeat history - meaning they will do whatever ot takes to be re-elected. This usually involves promises of entitlements to the masses and favors to various special interests. Which in turn means increasing government spending and debt. The effect on the equities of all this spending is debatable, but I'm willing to go out on a limb if you do... Since you're a student of history, I clipped this piece to explain the huge popularity of LG's new thread <gg> <<Well, it's official. For the first time since 1929, every living person in the United States of America has an opinion on where the Dow is going. And the diversity of market opinion, much like the diversity of individuals in the U.S., is endless. It seems that no matter where you go there is someone offering advice or opinions on what the Dow will do from here. It has become so extreme lately that one can hardly hear oneself think over the cacophony of conflicting market opinion. In the last two weeks alone we have noticed a considerable increase in this broad diversity and ubiquity of opinion. Some believe the bull is back with a vengeance and is here to stay. Others believe we have entered a long period of consolidation that will witness a net sideways pattern in the Dow for the next few months-to-years. Still others (ourselves included) are of a bearish persuasion, though to varying degrees, and believe a bear market accompanied by either a major sell-off or outright collapse is imminent. So which group is correct? May we offer that it doesn't really matter whose outlook is closest to being true at this point? The most noteworthy point of this catholicity of market opinion is not what one group thinks or the other, or what the majority believe. Its broad significance is that speculative activity has become rampant and is so widespread that almost no single group or individual is left untouched by it. Our individual and collective fortunes have become so inextricably linked to the Dow's performance that its very performance has become an obsessive mania—a common passion—that has become so big and ascinating that it has relegated every other important national endeavor to relative obscurity. Religion, politics, military questions—all of these have taken the proverbial backseat to the Dow and have in large measure been completely obliterated from the national psyche. When this happens, speculative activity has reached a climax and is destined to implode of its own weight. How can we be certain speculative activity has reached a peak? When speculation consists not only of actual financial dealings but of merely "speculating" on the Dow's performance, whether one is in the market or not, speculation has gone too far. The Dow has now become a common obsession in the U.S. and has truly replaced baseball as the national pastime. This alone provides all the clue one needs to determine a market peak. We have now arrived at that peak, even if the Dow continues to travel a bit beyond it in blow-off fashion. Our advice: unless you can truly afford to speculate (bearing in mind all of its attendant risk for potentially limitless losses), sell now while you still can, extinguish all unnecessary debts and make sure you have a bountiful supply of cash.>> Complete article at: gold-eagle.com Enjoy, TW