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Please look at the M-2 Money supply from January '87 to April '87
and go and find the man who said that market crashes occur 6
months after the M-2 money supply runs too far ahead of the
economy forcing the markets up too steeply and when they cut off
the M-2 money supply too fast the market will crash 4 to 6 months
later (as may be seen in 1987).
So this man is telling us the truth.
After this sell off we are currently in we shall see this market go
back up and retest our old highs (before any crash comes).
This was a "rotation" of just 8 stocks.
8 stocks represent 37.5 % of the whole market.
They are just getting killed right now.
Anytime any market moves up in a quarter faster than a 22.5 % angle
of appreciation it will come back down later to balance out its speed.
thanks, THM
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> From: Dan Walo <DWalo@xxxxxxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: MKT: WD Gann Forecast - Major decline ahead -Reply
> Date: Friday, August 29, 1997 12:01 PM
>
> The general bullish case for the stock market has received support from
> an unusual corner : Dr Milton Friedman !!
>
> In the latest issue of the "Friedberg Commodity" report Dr Friedman was
> asked if the current growth in the money supply was excessive and
> would eventually lead to a market crash.
>
> Friedman replied :" I do not believe the growth in money supply has been
> too easy. If you plot the growth of M2 in the postwar period, the
> Greenspan period has the been the most stable with the lowest rate of
> growth....(although) the stock market may have overshot, I do not believe
> we face a horrendous crash provided the Fed does not change its polciy
> of steady monetary growth"
>
> Now the question is - do we take Friedman's comments at face value or
> do we apply the usual contrarian spin ?
>
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