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

To: StockOperator who wrote (14337)	5/19/1999 11:20:00 AM
From: Compadre	Read Replies (3) \| Respond to of 99985

SO: Last week we were saying that the big boys would give a sign of were they want to take the market in the immediate future by now. Well, right now there isn't anything really obvious to me. In fact it appears as though they have not done anything. But lets review the events transpired since Monday. HWP had better than expected earning that gave the markets a much needed lift. Tuesday's FED announcement, presumably a very bad news for the market failed to trigger a sell off. Even a bad quarter from DELL has been ignored so far. AMAT good showing is being cheered and the SOX displaying its true colors by breaking out with conviction. Well, I thought that the big boy's signs were subtle, and if these were the signs we were looking for, they certainly are. What I am trying to say is that may be the inaction in view of bad news is our sign the big boys have positioned themselves on the bull's side. Regards,

To: StockOperator who wrote (14337)	5/19/1999 12:24:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 99985

SO, bullish sentiment among newsletter writers is back at it's early january high of 60,9%. the last time we had such consistently high readings was in 1987, incidentally a year where a bear market in bonds coincided with a bull market in stocks, same as now. also the trade deficit exploded in 87, which it is doing once again. let me see...what else happened in 1987? btw, at the market's peak in august 87, the S&P 500 p/e ratio was lower than at last october's lows. all this doesn't mean that we have necessarily seen the highs for this year already; one more run to new highs is actually what i expect to happen before the party ends. but it is a strong warning; the road ahead is treacherous, and sometime this year i fear that we'll see a very scary breakdown in prices, possibly worse than last years correction. i continue to be amazed at the state of denial exhibited by many people with regards to the bond market. when yields go to nearly 6% from less than 4,7% in less than seven months, it constitutes a bear market, yet no-one calls it one. all i ever hear from the people interviewed on cnbc is what a great buy bonds supposedly are at whatever level they're at, all the way down. there is a long term supportive trend-line on the bond futures contract that hasn't been broken yet (although we're awfully close), so the bond may well reverse and thereby start to paint a different picture overall. but before there is clear evidence of that i'd be very cautious. regards, hb