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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (536)	3/9/1999 10:03:00 AM
From: joel3	Respond to of 10626

Sun, Thanks for the info. It appears that you are trying to predict the demand for equities. On that basis you expect a near-term substantial drop in the market. Are you still a long-term bull? (Where are all these baby-boomers going to put their money?) This is a busy week for me, however, I would love to discuss this topic further. (Maybe this weekend.) Food for thought...I found this on briefing.com this AM... Dow 10,000 Here We Come After spurting about for nearly a month, market regaining its winning ways... Listed below are 10 reasons why Briefing.com expects current advance to propel DJIA to 10,000+. 10 Reasons to Expect Dow 10,000 1.Techs resuming leadership role: Sector's performance key to restoration of market psychology. 2.Interest rates headed lower: After rising by nearly 1% over past few months, Briefing.com expects the yield on the long-bond to gradually drift back to the 5.25% to 5.00% range as market overstated inflationary and Fed tightening threats. 3.Dow Jones Transportation Average (DJTA) poised for upside breakout: Index, which has badly lagged market for past 9-months, is approaching pivotal resistance at 3400... Briefing.com expects DJTA to pierce this ceiling on way to 4200-4400... Stronger than expected economy good news for this economically sensitive sector... Deeply discounted valuations also bode well... DJTA trades at roughly 17x trailing earnings, or half that of the S&P 500... Move to new high by DJTA would remove bearish Dow Theory argument. 4.Liquidity: Lots of money poured into money market accounts in the first two months of the year... As major market indices shake off ill effects of earnings warnings and rate fears, and move to new highs, money will pour into stocks... Already seeing evidence of this as equity mutual funds reportedly saw a net inflow of over $5 bln last week. 5.Financials are hot: yield spread, reduced global turbulence, discounted valuations, robust domestic financial markets and continued consolidation all factors underpinning influential sector... Group historically acts as good barometer of market performance. 6.Percentage of stocks below their 200-day moving averages dropped to level which suggests that market is near-term oversold... Last time we got such a reading was prior to October to February rally. 7.Nowhere else to go. Okay, maybe bonds, especially if yields do drop as we expect. But if they do, stocks likely to be bigger winners. Overseas markets still too risky in light of recent blow ups. And if you can repeatedly get better than 25% a year staying in large-cap US stocks, why shop elsewhere. 8.Favorable Fed policy: Despite stronger than expected domestic growth, Fed unlikely to adjust rates higher unless inflationary pressures emerge and there are simply no signs of any such pressures... To the contrary, CRB index recently set 24-year low... Wage pressures also easing... Don't be surprised if market starts talking more about possibility that next Fed move will actually be another easing... Okay, so maybe that's a stretch, but fears of a rate hike are all but dead and reality remains that Fed policy sending green light to market bulls. 9.Technically, support at 50-day moving average held with index subsequently breaking out of narrow 3-month range to set new all-time high on increased volume... In other words, techs flashing buy signal. 10.Number (10,000) itself acting as a magnet... Especially given that its only a few percentage points away.