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Non-Tech : MB TRADING -- Ignore unavailable to you. Want to Upgrade?

To: Rick Faurot who wrote (4640)	5/3/1999 9:12:00 PM
From: Eric P	Read Replies (1) \| Respond to of 7382

Rick: I agree with everything you said, from the perspective of a long term investor. However, for a daytrader, I am more interested in the movements of the bonds and how they might affect short term movement of the stock market. My experience is that in the very short term (5-30 minutes) weaker bonds are more likely to coincide with stronger stocks. This is exactly the opposite of what you would expect over a longer time frame. -Eric

To: Rick Faurot who wrote (4640)	5/3/1999 9:27:00 PM
From: TraderAlan	Read Replies (1) \| Respond to of 7382

Rick, 5.6% is still nirvana. The market used to be able to rally all the way to 7%. The difference is relative value. The P/Es are much higher now than 95 or 96. The fed rate adage is "3 steps and a stumble". For dippers, this means buy the first and second interest rate hikes after the market shakes out some. The problem is always the same: rising interest rates come when the economy is strong, which is good for profits (and good for the market). So there's always a war between the conflicting forces. Funny you should make that comment about volatility. Except for that 200 point drop last week, doesn't seem as choppy to me as last year. Less "liquid" but not quite as volatile. The market is definitely climbing the wall of worry. Re Eric's comment about short-term bond moves vs stocks, think all of us would benefit from hearing from those who know more about arbitrage strategies. That probably would explain a lot of things. I know there's arb between Sp cash and sp fx. There also must be arb between sp fx and bond fx. That may explain the tendencies. Alan