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To: Mohan Marette who wrote (103457)	2/21/1999 11:23:00 AM
From: Lockeon	Read Replies (3) \| Respond to of 176387

Mohan, A couple of perspectives on the economy and current market state... First, interest rates and the economy by Kudlow.... bloomberg.com <Snip> Try not to believe everything you read in the newspapers. A bunch of market gurus are filling the airwaves with the usual Phillips curve blather that strong growth will drive up inflation and interest rates. So the Fed stands on the precipice of tight money. So then bond prices fall and the stock market rally stalls. Blah, blah, blah. Yada, yada, yada. Don't believe a word of it. <snip> Second - current market conditions from decisionpoint.... decisionpoint.com <snip> Within the world of technical analysis there is a jealously guarded paradigm that states that the stock market cannot go up unless price movement is confirmed by breadth. In other words, the market cannot go up if the Advance- Decline Line is going down, because negative breadth is a sign of money leaving the market and an erosion of underlying strength. The focus is, of course, on the NYSE Composite stocks, and there is ample historical evidence to justify this belief. However, as I wrote a few weeks ago in this space, there is more than one conclusion one can draw from negative breadth. For example, because of the increased practice of indexing, money can be leaving lower quality stocks for the high-cap stocks that compose the major indexes. It you look at a chart of NASDAQ breadth versus the NASDAQ Composite Index, you will see that prices have been rising for years, even as the Advance-Decline Line has maintained a relentless down trend. Have a GREAT day.... PS - Did you get my second PM? Thanks...