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Bill, If you are going to quote from my postings to make a
counter-point, I would appreciate it if you do not quote my comments out
of context. My comment regarding bonds was not in any way an unqualified
opinion that bonds will continue to rally here. Even the AGet daily
chart which I posted by request suggests a w.4 correction is in order.
"The big surprise for me this week has been the turnabout in bonds -
they
have blown right through AGet's daily w.4 projection and caused AGet to
reclassify this rally from corrective to impulsive suggesting that more
upside lies ahead. It should be noted that the weekly charts remain in
w.4 decline so the intermediate charts have yet to confirm a change in
trend. The Jun-Dec spread in Fed Funds dropped from indicating 3
increases at 1/4 each to 2. Finally, corporate bond funds have started
to improve across short, intermediate, and long maturaties. In fact,
bond funds have performed nicely for several weeks now. Still, I think
some caution is warranted as rates appear to be significantly
discounting inflation prospects in wages, benefit costs (especially
health care), energy, commodities, and services. We are continuing to
hold bond funds (mainly corporates) for yield without adding to
positions or shifting duration."
Earl
----- Original Message -----
From: "T-Bondtrader" <t-bondtrader@xxxxxxxxxxxxx>
To: <eadamy@xxxxxxxxxx>; <realtraders@xxxxxxxxxxxxxxx>
Sent: Monday, June 05, 2000 5:50 AM
Subject: Re: [RT] Market Outlook
> > The big surprise for me this week has been the turnabout in bonds -
they
> > have blown right through AGet's daily w.4 projection and caused AGet
to
> > reclassify this rally from corrective to impulsive suggesting that
more
> > upside lies ahead.
>
>
> Here is an alternative perspective or a different conclusion from
evaluating
> the same picture!
>
> A few moons ago when I was visiting my daughter in the USA, I found
myself
> riding in the desert in Arizona and seeing the enormous water spout,
from
> many miles away. This huge column and the water falling, as the wind
blew
> it in an arc to the ground. Later we went to Fountain Falls and
sought it
> close up. The largest in the world, I was told, while I was thinking
of
> the one in Geneva...
>
> Anyway, on my return to England the bonds made and exact such pattern
and so
> I christened it Fountain Falls. On every occasion since then, after
such a
> pattern we have had lower prices. This is very much in line with the
> normal expectation of an Upthrust.
>
> The pattern is time was formed as the market retraced through the .618
> retracement line from the Contract High, but - and this is the
important
> bit - it then came back and closed on the 'other' side of the line.
> Consequently, I expect lower prices, rather than it "suggesting that
more
> upside lies ahead."
>
> So, it will be interesting to see what it does do. As a day trader I
> couldn't really care less what it does, because I will attempt to
follow the
> market wherever it goes. However, according to my analysis I shall
be
> looking for short trades, but quite willing to accept long ones, if
the tape
> says that is what it is going to do. But in the vein of the last
> continuation Doji Sandwich, I might well punt a put for the hell of
it...
>
> Incidentally, the yellow lines on the chart are the overnight high and
low
> and it is interesting that it could not take out the .618 line. Ah
well,
> we'll see very shortly. Meanwhile, I hope the Fountain Falls helps
someone
> to make some money. A pretty picture isn't it?
>
> Bill Eykyn
> www.t-bondtrader.com
> "Learn to read the tape"
>
>
>
>
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>
>
>
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