To: Moominoid who wrote (13401 ) 5/10/1999 10:50:00 AM From: pater tenebrarum Respond to
David, i fully agree with what you say about rates: they are the biggest danger to the market but the bond contract looks a bit oversold in the short term. but i strongly disagree that the improving breadth should be viewed as a positive, for two reasons: 1.wall street strategists and newsletter writers are increasingly citing the improvement in breadth as the reason why they have now turned bullish. keep in mind that these guys were mostly bearish or calling for a deep correction at dow 9,200. in my very first post on this thread i have warned that this was going to happen: an improvement in the a/d line would induce complacency. i also said that a move into basic materials and other beaten-down sectors would likely be the reason for the broadening, and frankly these stocks are clearly inflation harbingers. 2.historical evidence shows that almost every crash and/or strong bear market was preceded by a deterioration in breadth that was followed by a slight improvement in breadth up to the point where the final top in the market was reached (1929,1987,1972/73,1969 are examples to illustrate this). so don't be fooled by the action of the a/d line.
