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To: 16yearcycle who wrote (48624)	4/1/1999 6:06:00 PM
From: Rob S.	Respond to of 164684

That shows how much I am following the market lately - I thought that it was open until 11:00. That does affect it as we obviously have seen any nervousness due to the long weekend. Holidays are normally favorable periods for stocks. In fact, Fosback and other investment writers have analyzed this pattern over several years and found that the market often goes up 2-3 days before and a day or two following a major holiday. The typical influence is only about 1%, but a strong argument can be made that this and other trend factors can be used as a primary trading or investment strategy. Broader seasonality combined with the holiday trend statistically provide almost all of the gain of the market while only being invested in equities for 1/3 of the time. By that method, the selling season is set to start in 3-6 weeks. The Kosovo war is an unknown factor, but at this point there is no reason to believe that the market is being upset much by it. Another factor is that we have now come thru the earnings pre-announcement period. There may still be a few more warnings to come out but now more announcements can be expected that either meet or exceed expectations. The reaction I have observed so far is that marginally bad news can be causes for a big sell off in a stock and good news will lift up a stock, although perhaps not to the corresponding degree. That makes sense because many investors realize that the market has gone up a lot and they are a bit nervous. Most of the good news is factored in but any upsetting news can send investors running for cover before they take time to ask many questions. Despite the tendency for good news to come out at this time of the quarter, the market could be vulnerable for a bit of a correction in the weeks following. There also tends to be a positive flow of money coming into stocks during this period because of tax rebates. A spike up in money invested from overseas has also been reported - most probably due to unease in Europe over the bombing and refugee situation. I think the broader trend in foreign investment is for a investment flows into Asia and South America. Inflationary trends appear mixed. Commodity prices appear to have at least bottomed out (oil moving up but foodstuffs and raw resources sideways or somewhat down). Purchasing managers indicate a higher rate of growth than expected and unemployment is down. The consensus about inflation has been jockeying up and down but few expect to see the same benefits that the economy has enjoyed during the past several months. One major reason the US has done amazingly well despite near full employment and problems overseas has been an offsetting decline in prices. It is very unlikely that there will be a significant net drop in prices over the next several months. But wages are rising and the net effect of other inflationary inputs may move up modestly. I think there is good reason to be prepared to turn cautious, particularly into May and June.