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Great scenario with a couple of caveats:
1) This is the 5th leg down, not the 3rd. EWT says this is the final one.
The Nasdaq may hit 2800, but it'll be for a hour or a day.
2) Yeah - 401k money will come out of the market and go into.....????...
Maybe Treasuries with a terrific 6% yield that is going towards 7% as prices
plummet ?
Investors are now acclimated to 10%+ returns per year....some want 25%
returns.
I don't think money market rates are going to get there anytime soon.
Thus, those who pull out stocks and convert to cash, will just have to use
it for wallpaper.
Gold's a great investment too.....right !
3) the Fed will stop playing "bad boy" after June or July......the ALGORE
contingent will put Greenspan into "never-never land" until December...AFTER
the elections, they'll bring him back.
Prediction:
1) more fear and high vols - another Nasdaq low (May)
2) another bounce followed by side-ways action (June-July)
3) late summer rally into the elections (Aug-Sept)
4) yet another minicrash in mid-December (Dec-Jan)
Hold onto your hats !!! It's gonna be a wild few months.
> -----Original Message-----
> From: Layne Hermansen D.O. [mailto:lahermansen@xxxxxxxxxxxxx]
> Sent: Wednesday, April 19, 2000 4:44 PM
> To: omega-list@xxxxxxxxxx
> Subject: Market Direction - Nasdaq - personal commentaries
>
>
>
> Where are we headed? That's the question everyone is asking more so now.
> On the Chart, it looks like we just experienced the bounce rally from the
> second leg down.
> Question going through my mind is when we start the third leg
> down, how far
> we
> going? It looks like we have some support at 2861, which should give us a
> nice bounce
> off that. But if the general population starts pulling money out
> of 401ks,
> we'll most likely
> return to the 10 year trend line, Naz 1800, but with inflation, would put
> us near 2200-2400.
> That is a bullish trend line for the long term and it looks like all major
> decade rallies take off
> from that line as well.
>
> The third leg down, if it happens, isn't going to be pretty. I
> liked what a
> NYSE floor trader
> said, people will soon find their 401k's turning into 201k's. And for
> those who watch
> the Etrade commercial, that guy will be cured of money coming out of his
> waazzzooo!
>
> The stocks I follow going up, are going up on little volume.
> Where are the
> buyers for follow through? Sure there's traders, but they are not acting
> commitedly and are jumping out on any sign of weakness. Smells
> like a BEAR
> TRAP.
>
>
>
>
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