the market missed tanking in Oct, and am I suprised? : LUSENET : TimeBomb 2000 (Y2000) : One Thread

I was suprised when the market didn't tank in we are..November. I suppose it is a delay, a Y2K delay. No one can be sure if it will take a bath. The P/E ratios of today are nothing like they were years ago....about 70 years ago, in 1929. And so much broo-haha about how the fundamentals have changed. What has changed is the money flowing in. Many more people, including quick trading, has caused the market to explode. How far up can it go? who knows. But a market rise to 25,000 is possible, and a crash to 2500 is possible as well. I think the greed will keep it afloat, but can assume that if Y2K is serious event, then a crash is one of the fewer things to worry about. If however, come January things are "normal" and only a few glitches here and there, and supposing there were no panic because everyone employed a wait and see attitude, then the market will explode into a feeding frenzy, until better heads prevail. but again...who knows. as I stated, I would have thought last Friday the market would have tanked,,,what a wonderful opportunity to come back to didn't, and who knows.....I have been out of it since January...and won't get back in till next any gold out there?

-- rickoshade (, October 31, 1999


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Stan Faryna

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-- Stan Faryna (, October 31, 1999.

The market is most likely starting another bull run. I know some will want to flame me, but they have been way off most of the time. I see the market somewhere over 11K by the end of this week. After Friday, it is not out of them question to see a new record high on the DOW. The NASDQ had a new high Friday. I would also be surprised if gold stayed at the $300 level. It may in fact go back to the $280-$290 range. The only real question is will the Fed raise interest rates. Even if they do, it appears that this possibility may have already been factored in. As far as a crash goes, Rickoshade, don't believe too much of what you see or hear on this forum. Most but not all of the sources quoted have a negative bias. A good example of this is the newsletter I get every week called the Crash of 99 report. The guy that does it is disgusted. He thought it was going to tank. He basically has thrown up his hands in disgust. He now says he's not sure what's going to happen. At least he has admitted now that he does not know. Many of the people citing these sources mean well but they just fail to see them for what they are. Happy trading!

-- jb smith (, October 31, 1999.

Who the heck knows what's going to happen. I expected things to get bad too, not that I want them to, but I certainly thought it would. Flip a coin. You'll probably be as accurate as the prognosticators out there.

-- haha (, October 31, 1999.

There are reasons why hedge funds and the market have so far been able to avoid significant impacts related to flight to quality.

Friday October 22, 5:44 pm Eastern Time

U.S. asset-backed debt cheered by Fed window news

NEW YORK, Oct 22 (Reuters) - News that the Federal Reserve will expand the types of collateral it would accept for banks to borrow from its discount window tugged in asset-backed spreads to U.S. Treasuries and brought in dollar swap spreads on Friday.

``The announcement drove in spreads,'' said Tim Neumann, head of core fixed-income products at Chase Asset Management.

Another portfolio manager -- with an East Coast account -- said the announcement may benefit leveraged investors such as hedge funds but really may not be a major event.

``It is a backstop. It just adds confidence there will be additional liquidity at year-end,'' said the portfolio manager.

click for more

Tuesday October 26, 4:42 am Eastern Time

BOJ to set rates above ODR on emergency Y2K loans

TOKYO, Oct 26 (Reuters) - The Bank of Japan will set interest rates higher than the 0.5 percent official discount rate on any emergency, uncollateralised loans to private banks necessitated by problems with the Y2K bug, a BOJ official said on Tuesday. Such uncollateralised loans would be made in accordance with article 37 of the BOJ Law, said the official at the BOJ's financial and payment system office.

``With regard to article 37 loans, the terms including interest rate will be decided by the Policy Board on a case-by-case basis, in accordance with relevant laws,'' the official said.

Under article 37, the central bank can provide uncollateralised loans to private financial institutions which suffer temporary liquidity shortages due to unforeseen mechanical malfunctions.

But it says such loans will be made only in cases where a liquidity shortage would severely hinder the operation of the financial institution and cause systemic risk.

click for more

(from Sept.)

"While the evidence of precautionary inventory hedging to date is mixed, in the financial sphere, borrowers and lenders are clearly taking steps to build liquid assets and reduce their reliance on credit markets around the end of the year. This is reflected in a noticeable rise in deposit and commercial paper rates for funding that would be outstanding over year's end. Many corporate treasurers have moved forward their debt offerings to avoid any chance of a dearth of credit availability in the fourth quarter or difficulties funding short-term liabilities. The Century Date Change Special Liquidity Facility of the discount window that was approved by the Federal Reserve Board in July and the contingency actions of the Federal Open Market Committee announced by the Federal Reserve Bank of New York on September 8 should help to ensure an ample supply of liquidity and relieve funding pressures."

click for more

-- John Q. Doe (johnqd@aol.not), October 31, 1999.

There are two kinds or market analysis (predictive models), fundamental and technical.

Fundamental looks at long term trends, but is not at all good regarding timing. Fundamentally, gold should increase and the market tank. But when...? Tomorrow, next month, next year...?

Technical looks at market action. Traders by various esoteric means derive timing (buy or sell) signals from market action (price and volume) and sometimes other factors.

It is therefor possible to be bearish on the fundamentals, but bullish on the technicals.

If you are bearish on the fundamentals, you will be in gold in some form, or some sort of short fund like Prudent Bear (BEARX). Hopefully you don't dump all your available resources in at once. This is for the long term.

Whether or not you are bullish or bearish in the short term, that is where you do your short-term trading, if you do any at all. This where you need to learn about support and resistance levels (which are psychological and/or manipulated), patterns mentioned like flags, filling in the gaps, etc. This is short term and a whole differenct ball game.

So determine which game you are in or want to be in. If you get all torqued over a $20 or even a $50 rise or fall in gold, are you really looking at long term fundamentals?

-- A (, November 01, 1999.

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