|
PureBytes Links
Trading Reference Links
|
Stig -
I know I replied to your analysis of the H&S pattern. Actually, 104
would be closer to 7% than 6.50%, BUT THAT IS NO REASON TO BELIEVE THAT
WE CANNOT GET THERE (thus my greater disagreement with Bott than with
you).
My technical outlook suggests that:
1) 104 is more likely than 130
2) 104 is to be expected, just not this year
3) We are in a bear market for bonds.
Good luck and good trading Stig.
Steve Poser
--
Steven W. Poser, President
Poser Global Market Strategies Inc.
http://www.poserglobal.com
Stig Olausson wrote:
>
> Hi BOTT,
>
> Below you state some arguments, why, in your opinion, a severe decline (to
> 104) in Bondprices is highly unlikely.
> IF however we should get there, I am certain someone, somewhere could find
> arguments for rates to be correctly at 6.5% (your calculation), which, in
> my opinion is the problem with fundamental analysis.
> For the sake of argument, WHAT would change your mind? WHEN would you start
> to think that perhaps we are seeing 6.5% rates?
> Subscribers to TA often have pricelevels to help them change their minds.
> What do do fundamental students use?
>
> I am not saying we ARE going to see 104.
>
> The POTENTIAL, however, in the Head & Shoulder pattern SUGGESTS (experience
> from other similar patterns) a minimum decline to 104. I believe there is a
> 65% success rate on H&S patterns. I don't know the success rate for
> opinions.
> Of course patterns are subject to interpretation (as we saw on this list
> after I posted the H&S pattern) and failures are not uncommon either. But
> if we have a failure, at least we know when the pattern have failed (new
> brake of neckline).
> When do we know when we failed on our opinion?
>
> By the way Armstrong's World Capital Market Review, was just published and
> although he is bullish on bonds and have a target of 156, he doesn NOT rule
> out a fall in Bondprices since he states support levels at (charts through
> 4/19) 120.04, 117.28 AND 102.05-105.24. (104 would be right in the middle
> of the last level...)
>
> By the way, didn't it seem higly unlikely 2 years ago that we would reach
> 11000 on the Dow??
>
> regards
> Stig
>
> ----------
> > Fra: BOTTrader@xxxxxxx
> > Til: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> > Emne: Re: Sv: june bonds - Why break to 104 is unlikely
> > Dato: Thursday, May 06, 1999 4:24 PM
> >
> > If bonds break from current levels just under 120, down to 104, that's
> > roughly a 13% price drop - which would drive interest rates up to the
> 6.5%
> > level. At 6.5%, the average home buyer is going to be able to buy 13%
> less
> > total home square footage, 13% fewer cars, etc. Effectively, 13% of the
> > average borrowers marginal free income stream is going to be taken out of
>
> > commission. And this is the credit fuel that drives the
> interest-sensitive
> > portions of our economy that make the difference between growth and
> recession
> > ( and thereby the difference in the direction of stock prices) . An 80
> basis
> > point interest rate hike is amply enough to grind this economy to a soft
> > landing pancake if not worse. In today's economy, an interest rate
> change of
> > even 20 or 25 basis points can make a serious change in overall activity.
>
> > THIS is where technical analysis benefits from some "tempering" by
> > fundamental analysis.
|