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Today the spoo came within a whisker of the .382 fib retracement of the run from
July '94-July98. That's good enough for me to call it a bear market. Globex
players are busy trying to get a jump (up 17) on the dead cat bounce which
probably commences tommorrow. Could be off to the races if Asia can hold to
moderate losses.
Earl
-----Original Message-----
From: Val Clancy <valclancy@xxxxxxxxxxxxx>
To: Omega List <omega-list@xxxxxxxxxx>
Date: Monday, August 31, 1998 7:31 PM
Subject: Bear Market/Slide into Depression/Correction
>List,
>Here is my observation based on some simple fundamentals:
>
>Textbook fundamentals of Bear Market:
>- Bad Economy - contracting.
>- Inflation
>- High interest rates
>- Falling Stock Market
>
>Text Book fundamentals of Depression:
>- Bad Economy - collapsed
>- Deflation
>- Low Interest Rates
>- Falling Stock Market
>
>Present time situation:
>- Good Economy
>- Deflation or Low Inflation
>- Low Interest Rates
>- Falling Stock Market
>
>Analysis based on the above:
>- lower probability of Bear Market
> 1 point ( Falling Stock Market ) against
> 3 points( Good economy, No inflation, Low interest rates )
>- higher probability of slipping into Depression
> 3 ( Deflation, Low interest rates, Falling Stock Market ) against
> 1 ( Good Economy )
>
>Summary:
>The analysis tell that we are either in healthy Correction
>or slipping into Depression and not in Bear Market.
>Depression: there is only one point that keeps us away from it -
>collapsing economy. Emerging Markets economies are collapsing.
>Western economies are OK. If we have a collapse of the American
>economy that will put us right into the depression.
>Otherwise we are correcting at the moment.
>
>If the US economy holds up through the end of 1998 and there is
>no panic selling we are OK.
>If the US economy starts collapsing - we are dead meat.
>Comments, questions?
>
>Val.
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