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Some who think the market has not adapted a new mob psychology should
ponder these facts:
1. Three step and stumble rule is three successive rises in discount
rate foretells a market fall usually 3 to 9 montrhs in advance.
Personally it kept me out of the stock market and in the S&P for
most of 2001. BUT NOW the market reacts to the fear of a 1/2 %
increase in discount rate. The current rates are in line with what
brought Japan fabulous prosperity.
2. PE ratio of S&P constituent stocks used to correlate with S&P
price to a better degree. Now the S&P P/E ratio is high and S&P
futures do not believe it is going to come back in line.
3. Most economic indicaters [joblessness,housing starts, personal
spending,etc] point to an upturn yet there is no bullish follow
through...yet.
When so many people are in denial, that is the time, I believe to act
and is why I personally am heavily in reasonable P/E ratio equites
and will be in futures more actively later.
And, no, I still do not know Tom Jackson and the ideas presented
above are solely my observation.
John
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