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Hello Jerry,
Actually when I send posts to the Metastock list I am sending them to
you and the "countless" other cyber friends I have made through the
list. So you are not interrupting.
As far as how much of a correction the market will make, the analysis I
use doesn't give me information about that. It just tells whether we are
going to have a correction or not.
My expectations are that the market will still continue higher after
this corrections. But I do hear that there is reasonable concerns that
the market could take a big hit over a much longer period of time.
For example: First Call earnings growth estimates for the S&P 500 in
1998 was reduced to about 3 from about 11. And if margins get too tight
we could be in for trouble. (Nightly Business Report 5 March 98).
Although we have low inflation, doesn't mean that these companies won't
compete themselves into the ground.
Rates on the 30 year bond have moved above 6% and previous market
analysis by Wall street was counting on 5.5%. (Nightly Business Report 5
March 98).
(Not that I am personally gloom and doom on the market.)
Over the next few days and months we will get more than enough
information to sift through. To get a better picture of the business
climate moving forward from here.
Since there is so much money in the market I expect that that money will
find some place to go. And in an obvious way.
Not that I have enough experience to say where the money will go, but I
will guess that more of it will move into higher value companies.
One comment / question about current market breadth ,volume in
particular. Can we compare current levels of volume (or market breadth
for that matter) at the exchanges now with the 1974 levels with any
measure of reliability? 1974 and 1996 are so different. There is so much
more money in the market now than in 1974 and there is so much more
trading now than there was back in 1974. These alone effect market
breath a great deal today. Let alone electronic trading, etc.
I don't have an answer, just the the question.
Harley
Greatelto wrote:
> Harley....
>
> Other than the metastock list, I am not on your e-mail list on this
> subject.
> But the subject touches something I follow, so please excuse my
> comments.
>
> The small cap sector finally came to life in February....up about 7
> 1/2%....after generally failing in January. This has been a belated
> "January
> Effect" and really is a good sign. The overall breadth and volume
> measures of
> the major averages suggest further gains are in store. However, the
> markets
> are basically "over bought" at this point and a correction of up to 5%
> or so
> seems likely in the coming weeks. Of interest should be the recent
> highs
> being set by the NYSE breadth figures. Actually the readings are the
> best
> since 1974. And these new highs in breadth preceeded the latest new
> high in
> the DJIA....a confirmation, so to speak. The volume figures for the
> market in
> Jan. and Feb. were the two highest ever recorded. Let's hope we see a
> new
> volume peak above the Jan. 632 million average. If not, just keep in
> mind
> that volume peaks usually preceed price peaks.
>
> In a nut shell, a minor correction seems likely and then some more
> strength in
> the markets. It should be noted that John Q. Public was doing some
> heavy
> buying today....thus the market really gave a good account of itself.
> However, time will tell....
>
> Pardon my interruption!!
>
> Jerry
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