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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: ~digs who wrote (7315)	2/2/1999 11:38:00 AM
From: Canuck Dave	Read Replies (1) \| Respond to of 56535

It's bargain hunting day on the markets.... Who's got some good candidates? Let's scalp!! CD

To: ~digs who wrote (7315)	2/3/1999 12:13:00 AM
From: Trader J	Read Replies (1) \| Respond to of 56535

Protege - I like the advance - decline line graph and market breadth numbers. Especially these days as we can have a very negative breadth yet the market, usually the NAZ, can still be up 30-40 points. These Inets have had quite an affect on the markets as a whole that makes today's numbers seem askew. However, I have been worrying less about the adv.-dec. line recently because I believe we are becoming much more a market of stocks than a stock market. For this reason, I think traditional indicators are slowly going out the window. Many have tried since the first day of trading to gauge future performance based on past performance. To some degree this can be done, but I see today as an entirely new market that resists these fundamental theories to a large degree. July-August, if you recall was the great International breakdown in Asia, and then Japan. International issues weigh heavily on the markets and most do not give them enough weight when trying to judge where the US market will go. The US is responsible for keeping the dollar at a fair valuation at the entire globe uses our money, for the most part, as a standard. Take the Russian crisis late last year. When the rubel (sp?) was falling and Russia was trying to figure out what to do. They decided to release more rubels into the economy for stimulation.....as soon as they did, all the Russian banks purchased US dollars further destabilizing the rubel. Now we have Brazil with their devaluation. As their currency is devalued, a flight to quality begins and everyone flocks to bonds driving down the yields. Internation affairs are very important to our health here in the states. But historically speaking, the one thing that we cannot escape from is rising interest rates. As soon as this happens and we get inflation, people have less money, which means people save less and pull money out of the economy. When money flows from the economy, business slows, people lose their jobs, money slows to a trickle into equities and the markets in general, and recession can follow. The only thing I really fear and always keep an eye out for are the interest rates. Watch the fed. We are very healthy right now, but you never know what is around the corner. As soon as interest rates start rising, inflation fears will begin again and gold will be the play. That is the time to be looking at some good gold stocks such as NEM. So you see, there is always a way to play any market. Does this help any? TJ