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On Oct 30, 10:59pm, jim roush wrote:
> Subject: Re: Bear MKT
> You are indeed correct that no one interest rate measurement can call
> a market. However, I still maintain that a preponderance of evidence
> in interest rate/ monetary evidence is best at calling long term
> trends in equity markets.
I posted a note to RT a while ago, that looked at returns in the S&P
six months out, based up the %chnnge in long bond rates in the
pst 6 months, going back to 1960/so. The conclusion I reached
is that rate changes (not the absolute level, but the change)
alone didn't determine the outcome, however, all the big sell-offs
seemed clustered in the raising rates scenario, and one thing
for sure, the volatility of returns (risk) was always higher
if rates are rising. One of the reasons for the volatility is
that for example some pretty big rallies have been staged when
rates are high and begin to drop quickly, well at the top, the
percent change will show a big % move up, but then over the
next 6 months the rates move down and stocks move up.
This month's Tech. Analysis of Stocks & Commodities has a nice
timing system develeoped by Dennis Meyers, that incorporates
bond yield trends as one of its inputs. I don't know if this
system waould've been short in time this time around though.
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| Gary Funck, Intrepid Technology, gary@xxxxxxxxxxxx, (650) 964-8135
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