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RR,
Depends on what kind of turn you want? As part of the Chinese water
torture bear market, I am sure we will get some sucker bounces, just like
they give away drinks in Las Vegas to keep you playing. The planetary stuff
I interpret as bearish for July. My other cycles work is sideways to
slightly higher for July. So, most bullish case is a sideways trading range
for the coming month. Should be lots of chop, so throw away those trend
following robot programs or better yet fade 'em. Anyway, I don't see any
major rally due for the big picture until Turkey time.
If you want to buy something, sugar looks cheap and probably has limited
downside potential. If and when the economy recovers, and especially with a
cheaper dollar, depressed commodites will rebound quickly. Buying severly
depressed commodities
is like selling an out of the money put on the economy. At the first sign of
economic strength, you will get paid quickly On the other hand, barring a
major depression, your downside risk is relatively limited. The flip side
of this, which I previously posted, is that the stock market is historically
over priced via high p/e ratios based on phony earnings.
If the economy recovers, interest rates will go up, which will cause p/e
ratios to shrink.
Therefore, for the stock market to go up and stay up, earnings have to
outpace the rate at which their share's p/e ratio shrinks...kind of like
being long an out of the money call...
you can be right on the economy and wrong on the market. The lower dollar
will also increase inflation which will depress p/e ratios. Therefore,
higher earning won't necessarily translate to higher stock prices. S&P has a
shot at the 780 area by T-day.
Cheers,
Norman
----- Original Message -----
From: "reinar reinar" <reinar2020@xxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Wednesday, June 26, 2002 2:46 PM
Subject: [RT] S&P
> Norm
> I have been looking at this S&P chart for weeks and
> the prices are getting closer to the intersect every
> day.
>
> Do you have anything magical going on in the stars
> here that would give us a turn?
>
> R
>
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