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

To: pater tenebrarum who wrote (10148)	4/7/1999 6:59:00 PM
From: Jack Luo	Read Replies (2) \| Respond to of 99985

Heinz, thanks for pointing this overbought monster out to me. sold the puts at a tidy profit today, so it was definitely worth it. Could we share your tidy profit from shorting AOL. <gg> Are you still in NSOL? What's your take on its next movement. I took a small short position on NSOL before it went down to 94. I was some concerned when it stopped at 94 which was not a strong support, so I made a defensive move to box my shorts before it started moving up. Now I am in the long side and wondering if I should exit. NSOL went up another $4 after Prudential's positive comments, but gave it all back before closing. In the current situation, this market could go either way. Tomorrow's market direction will depend on how WS reacts to YHOO's earning. I haven't had time to look at the details; it sounds positive. We may see net stocks move again tomorrow. Any thoughts on that? It's dangerous to play either side in these two weeks. Maybe the best move is to stay on the sideline. Regards, jack

To: pater tenebrarum who wrote (10148)	4/7/1999 7:19:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

to all OT re: CHINA i'm always on the lookout for things that could come from left of field to trip up the market. does anyone remember the frequent scares last year regarding a potential devaluation of the chinese yuan (a.k.a.renminbi)? back then the chinese government concluded it had more to lose than to gain from a devaluation, as it would come out as asia's pillar of strength, thus gaining face and prestige. but times have changed. although china's official economic statistics still paint a rosy picture (Q4 gdp +9,6%), the communist party leadership is now struggling to introduce long overdue structural reforms while trying to avoid the pain that comes with them at all costs. the problems facing china's economy are awesome: an estimated 50-60% of all outstanding bank loans are duds, approximately 200 million workers in unprofitable state industries are believed to be redundant and the country is firmly in the grip of deflation. the party leadership fears the social unrest that could ensue should the economy falter. so far china could rely on exports as the remaining engine of growth, but recently export volumes have collapsed dramatically, due to all those devalued currencies in south-east asia and a sharp slowdown in european economies. a flood of dollars is said to have fled the country in recent months, and the black market rate of the yuan vs. the dollar has risen to 9,5 from the official rate of 8,28 due to fear of an impending devaluation. china has devalued it's currency regularly and usually under less pressing circumstances. it's not a question if they will devalue, but when. it may not happen tomorrow, but it will probably happen soon. if china devalues, the HK$ peg to the dollar will go as well, and another round of competitive devaluations across asia will follow. it'll be global financial crisis, part 2. i know, no-one is thinking about china anymore, and that's precisely why i'm wary. hb