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

To: shasta23 who wrote (14306)	5/18/1999 4:05:00 PM
From: Stephen	Read Replies (1) \| Respond to of 99985

My indicators make the day look much worse than the indices ... I must follow the wrong stocks (GG)

To: shasta23 who wrote (14306)	5/18/1999 4:33:00 PM
From: Joss	Respond to of 99985

Hi Stefan, In '87, I remember that as interest rates climbed, pundits came out of the wood work and had a myriad of reasons why interest rates would not stop the market's rise. I was way too early in pulling out...guess I just didn't understand the new rules as they were being explained <g>. My point is: The bull mentality has a momentum all its own. I think that is why there is a "Two steps and a stumble" attage. How long it will take for the bull thinking to subside is anyones guess but my experience is that it will take longer than most bears (especially me) believe possible. Steve

To: shasta23 who wrote (14306)	5/18/1999 4:39:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

Stefan, i agree that the market's reaction is a somewhat encouraging sign. but i don't believe that much headway will be made before the picture on inflation becomes clearer. until then i would expect the market to stay nervous and directionless, with perhaps a little downward bias. considering how overvalued the market is historically this is certainly no time to be reckless. i am very concerned about the fact that there is so much bullishness out there, specifically on the part of investment newsletter writers, wall street strategists and fund managers. the bear market in bonds doesn't inspire a lot of caution, and that is very worrisome. also mutual fund cash levels are extremely low. in the past this combination of factors has usually led at least to severe intermediate term corrections. any good news on the inflation front could of course lead to a blow-off, this possibility can not be ruled out. but i am not looking for the market to trend sideways for long. too many stock charts seem poised for some kind of a breakout. regards, hb