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I am told the parallel or inverse relationship of stocks and bonds depends
on where you are in the "perceived" / real economic cycle. Rising bonds
(fiscal stimulus with lower interest rates) in a weak economy is generally
good for stocks and yet late in the cycle as inflation concerns pop up, we
see the inverse relationship. The attached weekly charts are from 1995 to
the present are for a five year bull market in stocks. You can draw your
own conclusions but I submit the "perception" of "where we were" in the
economic cycle was almost as important as the reality. By that I mean,
early concerns about inflation turned out to be premature as the ebs and
flow of the economy revealed itself in economic and productivity indicators.
My (pre 911) perception was the economy was weak, over-capacity abounded
and as I have maintained for some time, deflation should be the concern.
How bonds will react to these "new"conditions remains to be seen. I can
build a case almost either way depending on which chart you look at
presently (long term top in bonds or a move to new highs), so in that regard
we are at an important inflection point perhaps. It is at these times,
maybe the "overall perception" needs to be analyzed? Massive financial
stimulus is occuring, the return to deficit spending and with that normally
comes the fear of inflation, yet bonds have been rallying, the question is
why?
What I like about bonds is they "do trend and tend to have sustained moves"
once turns occur. I don't plan to "feed the gator", so it will be nice when
they show their hand utimately.
don ewers
----- Original Message -----
From: "Dorothy Carter" <dorothy.carter@xxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, October 20, 2001 12:15 AM
Subject: Re: [RT] bonds top?
Up until recently we had since the 9/21 low the bonds and stocks pretty
much rallying together.. My premise is that the US$ is getting up
against resistance and as soon as we see US$ reverse I would expect to
see foreign sellers come in again and sell both stocks and bonds. Bonds
have their own issues right now in addition to potentially a US$ that
resumes it's downtrend.. ie new corp supply and US Govt refunding and of
course concerns over deficit spending because of cost of security etc
from 911 . I think that this next leg that Bonds, Equities and US$
will go down together... I don't see the Bonds going down because the
stocks are going up. I can only speak for what I see happening here
shortly.. once we get to a low which I would not label "retest" for
equities as I see the Sept low taken out and not a significant low.
----- Original Message -----
From: Lee Morris <mailto:LMorris@xxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, October 20, 2001 1:03 AM
Subject: RE: [RT] bonds top?
would a bond top support an equity advance (after retest)
-----Original Message-----
From: Dorothy Carter [ mailto:dorothy.carter@xxxxxxxx
<mailto:dorothy.carter@xxxxxxxx> ]
Sent: Friday, October 19, 2001 10:55 PM
To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
Subject: Re: [RT] bonds top?
I agree.. I've been saying that for the last 6 weeks since the prior
peak pre 911.... Retail has been plowing $$$ into bond funds.. look at
Ford today whose credit was downgraded.. they increased the size of
their bond deal.. the feeling on the street was float as much debt as
you can while you can because as you know the lower the rating the
higher interest rate you have to pay. Next week the Govt. bond market
has refinancing of I believe 2 & 5 yrs and a pretty heavy Corp
calendar as well.. supply concerns are going to put a lid on this mkt as
well as concerns about the deficit spending.. Today's reversal in the
long bond does appear as I suggested that we are making a H & S
formation... I would expect 102.12 - 102.06 to be seen and If I get
lower targets I'll share it with you.
----- Original Message -----
From: Don <mailto:detomps@xxxxxxxxxxx> Thompson
To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, October 19, 2001 10:29 PM
Subject: Re: [RT] bonds top?
Don and Lee,
Merrill-Lynch is furiously packaging bonds for the public.. broker
bragging of x Hundreds of Millions going into these packages. I always
get interested in a top when ML starts really marketing. The last time
was the intro of their B to B internet holders.. it had to have called
the top by a couple of weeks.
Don
Subject: RE: [RT] bonds top?
Don, interesting - first it is interesting to see you use the gator. I
just ffinished his book and like the system. Answer me this batman -
what is a yawn and there does not appear to be a way to do his momentem
indicator "AC" in AGET as it is a MA of the 5/35 do you just ignore this
indictor or have you found a way around this limitation. thks
-----Original Message-----
From: Don Ewers [mailto:dbewers@xxxxxxxxxxxxx]
Sent: Thursday, October 18, 2001 8:08 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] bonds top?
Attached are the AGET charts (60min and daily).
The 60min chart which is measuring the "wave 4 from 9-20-01 on the
daily"
indicates we may make another new high to a MOB (108-16 to 108-24) at
least
(it can go higher) so in agreement with Clyde's chart.
The fact that the bond retracement has exceeded a .786 retracement on
the
daily is a clue that maybe the 60min is right? The MOB on the daily
is
somewhat lower (107-24 to 108-01 but it is not locked in yet so may
change
(locks if a new high is made)).
Ignor the gator (three bold colored lines) on the 60min although it has
made
some great calls lately.
don ewers
----- Original Message -----
From: "Dorothy K. Carter" <dorothy.carter@xxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Thursday, October 18, 2001 1:05 PM
Subject: Re: [RT] bonds top?
I don't know how accurate the vol is on my source.. but it appears bonds
have been rallying on liter vol. than the down draft low going into
9/20. chart appears to be making right shoulder....... I'd still guess
we are in window coming up shortly where bonds,stocks and US$ resume
down together .. I'd still watch for 102.12 102.06 target to be met
----- Original Message -----
From: Clyde Lee <mailto:clydelee@xxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
Sent: Thursday, October 18, 2001 1:42 PM
Subject: Re: [RT] bonds top?
We've retired SwingMachine for a while but SwingTimer show the
attached.
Clyde
----- Original Message -----
From: azeem <mailto:azeemb@xxxxxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
Sent: Thursday, October 18, 2001 11:11 AM
Subject: [RT] bonds top?
will bonds exceed prevoius high? or is this the top
what does the waves say?swingmachine say?
thanks
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