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Date: Sun, 31 May 1998 09:40:29 -0600
To: wml@xxxxxxxxxxxx
From: Jeff Walker <jwalker@xxxxxxxxxxx>
Subject: Walker Market Letter - FLASH UPDATE - 5/31/98
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...............................................
W A L K E R M A R K E T L E T T E R
5 / 18 / 98
FLASH UPDATE
<http://www.lowrisk.com>
...............................................
As of the market close on 5/29/98 the Signal Strength for the
Lowrisk Market Allocation Model rose from 8 to 10. This means
that our Graduated Strategy will move from its position of 25%
in the stock market and 75% in cash to a position of 50% in the
stock market and 50% in cash (or money markets). This switch
will be effective as of the market close tomorrow (6/1/98). Our
Graduated Strategy moves assets into and out of the stock market
in 25% increments. Our other strategies remain unchanged. The
current status of our four strategies is detailed at the bottom
of this update.
Long time readers know that we have had a negative outlook on
stocks since mid April and the Signal Strength on our model has
been declining since 4/24. In that time the Signal Strength dropped
from 18 to 8. This is now the first uptick. This change in Signal
Strength is due to declining interest rates. In late April the 30
year T-bond rate was over 6%. It is now down to 5.8%. Shorter term
rates have also dropped. In general, lower interest rates are good
for stocks, and our allocation model takes this into effect. It is
not unusual for the Signal Strength to fluctuate somewhat in
turbulent markets before settling down. Whether that is the case
this time, or whether the Signal Strength will start trending up
remains to be seen.
This rise in the Signal Strength does not leave us overjoyed at the
current stock market. Frankly, we don't find much to be encouraged
about right now. Last week's steep selloff early in the week left a
very oversold market. These kinds of dips are normally met with very
enthusiastic buying, but volume and buying dried up on Thursday and
Friday. This could have been due to the holiday shortened week, but
still it is not an encouraging sign for the market. Look for our full issue
of the Walker Market Letter tomorrow, 6/1.
We just went back and updated our '98 Crash page to include the
charts through last Friday's close. This is always one of the most
popular pages on the site. You can see it at:
http://www.lowrisk.com/98crash.htm
Disaster Avoidance Strategy - 100% in stocks since 4/21/94
---
Graduated Strategy - 50% in stocks, 50% in money markets as of 6/1/98
---
Timing Strategy - 100% in cash or money markets since 5/11/98
---
SuperBear Strategy - 100% in money markets since 4/24/98
For more information on the Lowrisk Market Allocation Model and
our four strategies stop by:
http://www.lowrisk.com/mtm.htm
Good luck,
Jeff
Sponsors of the Walker Market Letter reach more than 15,000
mutual fund and stock investors. Send sponsorship inquiries
to <mailto:sponsor@xxxxxxxxxxx>.
===========================
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===========================
Copyright (c) 1998 by Jeff Walker, Lakewood, CO
Disclaimer:
The financial markets are risky. Investing is risky. Past
performance does not guarantee future performance. The
foregoing has been prepared solely for informational
purposes and is not a solicitation, or an offer to buy or
sell any security. Opinions are based on historical
research and data believed reliable, but there is no
guarantee that future results will be profitable.
***************************
jwalker@xxxxxxxxxxx
http://www.lowrisk.com
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