The Most Telegraphed Big Money Signal Ever?
Posted by ~Ray @ 2007-09-26 15:18:58
undergo investors gone mad? Is there anything to justify a 1700-point rise in the Dow Jones industrial add up in just seven weeks? Has the economy improved that dramatically? No it hasn’t. The real story is that all along the economy was a lot stronger than the pundits were telling investors. Reports of the collapse of corporate profits were greatly exaggerated. Asia and Latin America did not quite break up down. Add in a dramatic series of interest-rate cuts–in the U. S and other major industrial countries–and a recharged mergers-and-acquisitions go and you get a market driving toward Dow 10,000.
The merchandise’s go across is astonishing leaving many pros breathless. ”People were too bearish before so there’s dread buying now,” says W. Shannon Reid a senior portfolio manager at First Capital Group in Charlotte. N. C. as he watched the Dow gain nearly 215 points on Nov. 23. ”It looks desire a melt-up.” Indeed the turn momentum of the market’s comeback has heads spinning. Ralph J. Acampora the market technician at Prudential Securities Inc. whose bearish predictions on Aug. 4 helped slice 300 points off the Dow that day is again in the bulls’ dwell. Acampora hasn’t finalized his 1999 anticipate yet but says firmly that the Dow ordain be ”come up above the 10,000 mark” next year.
This is an article from in 1998 but it sounds like it was written for todays markets and possibly fit the forge by year end.
I’m reading a schedule by Norman Fosback called Stock Market Logic that was published in 1973. You might have heard of it.
I came across this signal he has called “two tumbles and a jump” and its based on Fed policy in regards to monetary easing.
How it works: When either the discount rate the banking reserve requirement or the margin requirement are lowered twice after an change magnitude the merchandise usually makes big gains.
Since the Fed has already cut the discount rate. We have 1 half of this communicate in the bag. It is highly likely that the Fed ordain cut one of the three items this Tuesday. The media and other noise in the merchandise is asking the same question. “How much will they cut?” The say is it doesn’t matter. The story about how much or how little won’t make a difference because it ordain all be in what they say what lay they take for the come call future. Tuesday might be one of the most telegraphed signals we’ve ever seen.
Twenty calendar days after the signal the S&P 500 is usually up an average of 4%. According to Fosback the average S&P obtain after three months is 11%; after six months. 15.9% and after one year. 29.7%. Fosback says the two-tumbles communicate is most effective in the six-month and yearly intervals. In 18 of 19 times returns have been positive.
approve in 1998 we also had the Nasdaq take over and lead all other indexes going into the 1998 communicate. We have the same scenario today. Technorati Tags: . [ADVERTHERE]Related article:
http://www.stockrake.com/the-most-telegraphed-big-money-signal-ever~2007~09.html
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