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

To: Giordano Bruno who wrote (13088)	5/6/1999 9:38:00 PM
From: stockycd	Respond to of 99985

jj, Bonds were closed at that point and couldn't go any higher. quote.yahoo.com@^dji AT&T, JNJ, and AA were the biggies. Chris

To: Giordano Bruno who wrote (13088)	5/6/1999 9:45:00 PM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 99985

>>Any guesses as to what propelled the DOW 94 points while bonds maintained their sell off?<< Yeah, irrational exuberance and J6P cover up. I was amazed as I read through SI tonight. Warning, this will be a long post. In AG's speech today, he addressed many of the issues we talk about here. Greenspan is an amateur of economics I admit and not as knowledgable as those that "have the vision and imagination of the future" that the internet traders have. He addressed internets I beleive with his comment... " I do not say we are in a new era, because I have experienced too many alleged new eras in my lifetime that have come and gone. We are far more likely, instead, to be experiencing a structural shift similar to those that have visited our economy from time to time in the past. These shifts can have profound effects, often overriding conventional economic patterns for a number of years, before those patterns begin to show through again over the longer term. There was far greater justification to view the future with unbridled optimism of a new era a century ago than today ....." Another favorite that occurs across these boards .... "...analyst's continous upward revisions reflect what companies are reporting to them about improved cost control, which on a consolidated basis for the economy overall, adds up to accelerating labor productivity. The alternative explanation--more rapid growth in earnings from operations abroad, a rising rate of increase in value-added prices received, or from an economy-wide prospective, ever faster labor force growth--are not credible. (In other words when you see these reasons a stock should go up, run for cover and short the living heck out them <g>) Thus, companies are apparently conveying to analysts that, to date, they see no diminuation in expectations of productivity acceleration. This does not mean that the analysts are correct or for that matter the companies, only that what the companies are telling the analysts about their productivity and profits are doubtless reflected in the longer term profit projections...." ( cost control is the only reason for increased profits, all other excuses are hogwash) Another little gem was about 4 paragraphs later were he basically stated that technology is becoming a commodity that is getting cheaper and cheaper and soon will will come under the constraints of the tight labor market. He also reported that Purchasing managers have reported no material shortages in the last 3 years. Gee how many times did we warnt eh DELL heads that this day was coming and we were all wrong and they were right. My basic gyst/translation of the greenspeak ... Inflation should have happened long ago which really amazed us and we have been trying to walk a tight rope since the cycle should have taken this market down a long time ago. The only reason that inflation didn't grab you all by the nads by now was that Oil was cheap and labor costs stayed down because as technology advanced, you were able to get rid of warehouse workers and bean counters due to automated inventory, internets sales and mroe accurate input and output accounting. Hey guys and gals, Oil ain't gettin cheaper anymore and technology has done about all it can to let you fire all those people so the tight labor market is about to bring this market to it's knees. Oh and when you offer to pay those employees with stock options in a bear market, they are going to throw heavy hard objects at you so get ready to have to pay real cash from now on that is going to make your accounting books look real bad since you can't hide what you are really paying those people anymore. Good Luck, EDIT - I will add a TYX chart at the MDA site soon if not tonight. Lee