View 04/97
The Contrarian's View
Vol. XI, #9, April 30, 1997
The Contrarian's View is published 11 times per year on a mostly-irregular schedule, and the views expressed are those of the author and editor, Nick Chase. Because nobody can predict the future, results of past suggestions or recommendations are no guarantee of future results. Material in this publication may be freely quoted provided proper attribution is given to its source. Subscription rate: Free on the Internet through the World-Wide Web service at Assumption College. Using your favorite Web-browsing program, Open URL http://nick.assumption.edu. Mailed paper subscriptions, one year for $39 to The Contrarian's View, 132 Moreland Street, Worcester, Massachusetts 01609. There is a limit of 50 paid subscribers at one time; please check for availability before sending any money. Sorry, Visa and Mastercard are not available. Overseas subscription rate, U.S. $54. Unsolicited material sent to us by UPS or by courier other than the postal service is refused and returned to sender! Phone: (508) 757-2881
A QUESTION ANSWERED
A reader writes: Hi Nick, With regard to your "debt overhang" post, I was wondering if you plan to ever edit and update for the present?
For instance... your comments about IBM's crashing stock price seem to hold little weight as an analogy, considering the rebound in share prices. Additionally, the ability of our government to indefinitely postpone any financial crisis (be it with smoke and mirrors, or whatever) appears to be "immutable".
When I first read your "debt overhang" (about a year, or year and a half ago) I was quite impressed by the argument... find it quite compelling.. and in all honesty I'm waiting for it to occur. But as time marches forward it appears that the government may be able (as stated previously) to postpone this crisis indefinitely.
Do you think that the crises you originally postulated will ever occur in your lifetime?
Generally, I do not go back and rewrite and reissue past commentary such as Debt Overhang, because I feel it is a disservice to the reader. When I try to peer into the future, I do the best I can at the time with the information that's available.... then I let that commentary stand, for good or bad. I lay no claims to perfection and I find that I can benefit from analyzing where I "went wrong"... and I feel the reader can benefit, too, even if the analogies do become dated. There's already enough people trying to rewrite the mistakes in their track records to try to make them go away, in an industry that's replete with shills, pimps and charlatans, and I'm not about to join them.
What I will do is "update" my views based on new information and the perspective that the passage of time provides. For example, I last commented on the "debt overhang" issue in September and October 1996 and concluded that (a) the official budget deficit is a "cooked" number, and (b) the crisis has only been postponed for a few years.
The reader is getting impatient. My original projection for the debt implosion was in the next century, probably around the year 2005, and the improvement since 1993 in the annual budget deficit has put off the crisis for only a few years, probably not past 2010 when the baby boomers begin retiring in great numbers. You probably won't see any real cracks in the system until early in the next millennium, and they probably will take the form of broken promises, which is the easiest way out for the politicians.
The question implied, but not asked, by the reader is: Will the government's "immutable" ability to "indefinitely postpone" a financial crisis end in one big bust, or are such building crises self-correcting, as are many other excesses that crop up in our capitalist system, so that as people become increasingly aware of the debt problem it will be dealt with and gently wound down?
I tend to lean toward the "cyclical" theory, since the history of economic advance over the centuries has been one of cyclicality, but that does not mean that some of the cyclical "corrections" will not be real humdingers, such as the Great Depression of the 1930s. And contrary to the reader's belief in the apparent "immutable" power of government to keep things going, I see the government as bungler par excellence.
A look at past manias will demonstrate that for most of them, governments played a central role. John Law's Mississippi scheme in France in the early eighteenth century would not have been possible without the collusion of the Regent, who assigned monopoly trading rights and acquiesced to printing-press money (assignats). England's South Seas Bubble of the 1720s also included monopoly trading rights, plus an effort to privatize the national debt. The 1880s stock-market bubble in Britain was set in motion when the government forced bondholders to accept artificially low yields. The 1920s boom and bust in the U.S. was, in my opinion, a consequence of the introduction of government-regulated fractional-reserve banking (i.e. the Federal Reserve System). The current stock-market bubble owes its origins to the Federal Reserve driving short-term interest rates to absurdly low levels in 1993 in an effort to reliquefy banks, thus forcing owners of money to seek higher returns elsewhere. (Of the major manias, only the Dutch Tulipmania seems to have been almost entirely a private thing.)
Thus, I see government as an amplifier; it causes a trend to go much further than it would if supported by the private sector alone, because it can throw both its economic clout and the force of law into the building mania. Government, in effect, provides leverage for the trend; and, as we all know, leverage is a beautiful thing on the upswing, but it's sheer hell on the downside.
The history of the post-WWII U.S. economy is that (thanks to the New Deal) the fortunes of the economy and of the government are inextricably entwined; thus one would not expect the economy (or the stock market) to run into real trouble until the solvency of the government itself is called into question, in the 2005-2010 timeframe I mentioned earlier. But there is a psychological factor involved; when stocks become so overblown that a meltdown is likely imminent, will the resulting crash spread pessimism from the markets into other areas? It did in 1929, but not in 1974 or 1987.... I think it depends on the size of the mania. My fear is that the current mania for stocks is big enough, and the meltdown will be psychologically damaging enough, that it could be the beginning of when "things go wrong".
With the public looking for scapegoats, Bill Clinton may find that his scandal-shedding Teflon skin suddenly turns to Velcro; and with pessimism spreading, many of the deals which looked sound in good times will, in hindsight, be seen as grossly overmargined and foolish in not-so-good times (as in Japan today). When things go wrong, they tend to go wrong all at once, as in the collapse of the former Soviet Union. There is no secret to this; it is just human nature at work. Like love and hate, greed and fear are two sides of the same coin, and the flip can be quite rapid.
As to whether I will see the crisis in my lifetime, I have been asking myself that question frequently, and I really don't know. I can't see the current trend going beyond about the year 2015 without major upheaval or collapse, and with a little luck I'll still be alive then (unless a collapse ends in nuclear war, in which case it might be better for me if I'm not alive then). The entire post-1932 period has been one of divorcing currency from gold (which provided a generally-accepted check on credit expansion) and of governments guaranteeing to make whole those people and institutions caught up in economic mistakes. Nobody really knows how far this can go.... the Roman Empire ran on funny money and excessive regulation and taxation (for that time) for more than a century, until the resultant moral decay led to its invasion and collapse. But I do think the current overleveraged financial positions of governments and individuals leave virtually no margin for error in the event of, say, a severe recession or depression or major warfare.
I will feel more cheerful when I see more people willing to take responsibility for their own actions, rather than shift the blame elsewhere; and when people place more faith in their own initiative and abilities, and less in government "solutions". But this, I think, is unlikely to happen until it is demonstrated that, with the current government-as-sugar-daddy economic system, the politicians ultimately are not able to deliver the promised free lunch, only misery.
QUOTES FOR THE MONTH
....a nation's sovereign credit rating lies at the base of its current fiscal, monetary, and, indirectly, regulatory policy. When there is confidence in the integrity of government, monetary authorities -- the central bank and the finance ministry -- can issue unlimited claims denominated in their own currencies and can guarantee or stand ready to guarantee the obligations of private issuers as they see fit.... That all of these claims on government are readily accepted reflects the fact that a government cannot become insolvent with respect to obligations in its own currency....
It was not always thus. For most of the period prior to the early 1930s, obligations of governments in major countries were payable in gold. This meant the whole outstanding debt of government was subject to redemption in a medium, the quantity of which could not be altered at the will of government. Hence, debt issuance and budget deficits were constrained by the potential market response to an inflated economy.... There is little doubt that under the gold standard the restraint on both public and private credit creation limited price inflation, but it was also increasingly perceived as too restrictive to government discretion....
It is important to remember that many of the benefits banks provide modern societies derive from their willingness to take risks and from their use of a relatively high degree of financial leverage....Traditionally this has been accomplished... so that individual depositories could turn illiquid assets into liquid resources and not exacerbate unsettled market conditions by the forced selling of such assets or the calling of loans. More broadly, open market operations, in situations like that which followed the crash of stock markets around the world in 1987, satisfy increased needs for liquidity for the system as a whole that otherwise could feed cumulative, self-reinforcing contractions across many financial markets. Of course, this same leverage and risk-taking also greatly increase the possibility of bank failures....
Any use of sovereign credit -- even its potential use -- creates moral hazard, that is, a distortion of incentives that occurs when the party that determines the level of risk receives the gains from, but does not bear the full costs of, the risks taken... It is a difficult tradeoff, but we are seeking a balance in which we can ensure the desired degree of intermediation even in times of financial stress without engendering an unacceptable degree of moral hazard....
To be sure, we should recognize that if we choose to have the advantages of a leveraged system of financial intermediaries, the burden of managing risk in the financial system will not lie with the private sector alone. With leveraging there will always exist a remote possibility of a chain reaction, a cascading sequence of defaults that will culminate in financial implosion if it proceeds unchecked. Only a central bank, with its unlimited power to create money, can with a high probability thwart such a process before it becomes destructive. Hence, central banks will of necessity be drawn into becoming lenders of last resort... central banks are led to provide what essentially amounts to catastrophic financial insurance coverage. Such a public subsidy should be reserved for only the rarest of disasters.... We have the responsibility to prevent major financial market disruptions... if necessary in rare circumstances, through direct intervention in market events. - Alan Greenspan, January 14, 1997
Let's recap: The Fed, the government and the foreign banks create a lot of inflation, and the BLS hides it. This inflates the stock market; the Fed gets worried that its house of cards will come crashing down, so it manipulates the market whenever it tries to correct itself and return to a more reasonable value. Then the chairman of the Fed calls it "irrational exuberance" and tries to talk the market down! ....What he is trying to do has never been done before. He is trying to put both a ceiling and a floor on the market. Theoretically, if he can keep the market in a range for a long enough period it will work out all the excesses. I wish him good luck and I sincerely hope he can do it, because the alternative is not a pretty sight. - Timothy McMahon
Having covered the Fed as a journalist in years past, nothing it does surprises me.... you come up with Greenspan as a Wizard of Oz trying to keep the house of cards from falling. He may technically not have the right to do this, but in a Congressional hearing he could convincingly argue that it was all justified to protect the banking system. - John Tompkins
....43.5% of the S&P 500, 44.6% of Big Board stocks, 61.3% of Amex stocks and 76.8% of Nasdaq stocks were down at least 20% from the highs they reached between the start of '96 and the end of this year's first quarter. And.... ...22% of NYSE stocks, 42.5% of Amex stocks and over 60% of Nasdaq stocks were down 30% or more. ...We're sure glad they don't make bear markets anymore. - Alan Abelson
If Thomas Edison invented the electric light today, it would be reported on the evening news that the candle-making industry was threatened. Ralph Nader would announce a lawsuit on behalf of poor people who might get electrocuted. And the candle workers union would have at least two senators introduce a bill to block electricity on behalf of their industry. - Newt Gingrich
STOCK MARKET OUTLOOK
Last September I raised the question, as claimed by Orlin Grabbe, did the Federal Reserve manipulate the stock market upward from a near-10% correction last July? And my answer, based on the high probability that the Fed intervened in the 1987 Crash and on the empirical evidence of the rapid snapback in July, was: "Probably".
Since then I've been looking for the "smoking gun" that the Fed is actively intervening in the stock market (other than the "inside information" Grabbe appears to have), and now it may have been found. My attention was first drawn to a January 14, 1997 speech Alan Greenspan delivered in Leuven, Belgium, by Timothy McMahon in Financial Trend Forecaster. Subsequently, John Tompkins located the complete speech on the Internet, and excerpts appear in this month's quotes.
The boldface portion of the quotes is perhaps the closest we'll ever see Alan Greenspan come to admitting that the Fed intervened in 1987 following the Crash. (You will recall, in 1987, the day after the crash, in the early afternoon liquidity dried up and the specialists on the exchanges were faced with ruin as trading ground nearly to halt. Then a "mysterious buyer" snapped up a block of Major Market Index (components of the Dow) futures, and shortly thereafter the Fed announced it would provide liquidity to banks lending to the specialists. That carried the Dow out of its slump, though most stocks did not bottom until six weeks later. The identity of the "mysterious buyer" was never uncovered, but the most likely culprit was the Fed.)
A careful reading of the quotes would seem to indicate that the Fed has intervened subsequently in the stock market when crashes threatened (stocks off by nearly 10% and plunging); October 1989, July 1996 and April 1997 would be the most likely times this intervention would have occurred. And even if the Fed didn't intervene on any of these occasions, Greenspan has certainly telegraphed his willingness to intervene when he thinks it's needed.
Perhaps this is the "new era" that the novices have arrogantly declared has arrived. When "irrational exuberance" strikes, stocks can rise 15% to 35% per year; and when they threaten to return to more sane levels, the government will prevent it. This gives the illusion that (as any novice will declare) stocks are less risky than cash in the bank, as their long-term rate of return is guaranteed to be greater, and one can safely be in the market without suffering any real pain (such as a major bear market).
But before the bulls put such unbounded faith in the power of government, perhaps they should look at the evidence: Even if the Fed were in full control of the situation, it is now on the side of the bears. Greenspan has tried to "jawbone" the stock market into submission with his "irrational exuberance" comments, and club it into quiescence with a small interest-rate increase (probably not the last). Clearly he doesn't want to see the bubble grow any bigger. The ideal situation (as Timothy McMahon has pointed out) would be for stocks to stagnate for awhile, propped up by Fed intervention against collapse, while the "real economy" catches up and stocks are again fairly priced. My calculator tells me that at a 12% growth rate for corporate profits.... more than four times the growth rate of the economy.... equilibrium would be reached in 6.9 years. During that time, the total return on stocks (from dividends) would be about 14%, while "cash" at current interest rate levels would give a total return of about 45%.
The problem with this scenario is: Even the Federal Reserve doesn't have enough money to keep the entire stock market afloat, unless it decides to print a bunch. (The stock market is currently absorbing more than the net national savings, meaning "investors" are borrowing elsewhere to put money into stocks.) It can maintain the illusion of a healthy stock market only by leveraging its position with derivatives. This has the effect of keeping the big-cap stocks afloat, while other stocks are gripped by the bear. Indeed, this is just what we're seeing now; most sectors of the stock market are clearly in a bear market, some since May 1996, while the stocks in the weighted averages such as the Dow and S&P are (currently) neutral.
An unintended side effect could be that the Fed will make the bubble even bigger through its open-market interventions. As "investors" compare the returns from their managed mutual-fund portfolios (declining) with the averages (modest gain from dividends) they will go with the higher rate of return, and switch into index funds which, by definition, invest in proportion to the weighted averages. Supply and demand will drive the indexed stocks higher, while the others sink even further. Indeed, if a series of Fed interventions following near-10% corrections succeeds in every instance, it is hard to see how the outcome could be otherwise, right up to the point where the interventions finally fail (or the Fed gives up trying).
But I think a more likely outcome is that, after awhile, the public will see that the total return from (even the Fed-propped-up) stocks is considerably less than from "cash", bonds or other competing instruments, and will opt for greater safety and return by putting its money elsewhere. This is "hot money" we're talking about here.... the novices aren't going to put up with a minuscule return from stocks for very long after having become accustomed, from the experience of the past few years, to expecting 15 to 17% per year ad infinitum. When the number of "switchers" reaches critical mass, the meltdown will be upon us. I still think the period May to July 1997 is the most likely time for the meltdown; but if you see more of these "recoveries-from-not-quite-10%-corrections", then assume that the Fed is at work and realize that it does have sufficient clout to postpone, but not prevent, the inevitable.
I am inclined to agree with Orlin Grabbe: "Well, I say Greenspan has no idea what he is doing. He should stay out of the stock market entirely.... ....pumping up stock prices is not the way to stem a money panic. It only complicates the problem." In his speech, Alan Greenspan mentioned the "moral hazard" inherent in being lender of last resort. Is it moral to keep (a part of) the stock market pumped up so the novices pour in their money at the highest prices (in relation to historical measures of value) of the century, while the pros, who understand value, unload their stocks? Or are we witnessing the heavy hand of big government about to turn a small problem into a major mess, as it has done with the welfare structure, tax code, tort legal system, regulatory nightmares and other areas of government we have come to know and despise? Let's hope that when the crisis comes, Greenspan is still able to do the job he was hired to do, keep the damage from spreading to the banking system.
By the way, there was widespread belief by the public in 1929 that the federal government would keep the stock market from crashing. It didn't.
PORTFOLIO REVIEW
The combined performance of the portfolios (including predecessors, but excluding "PIG" and TIAA/CREF) from January 1987 to the present, adjusted for the dilutive effect of added cash, is +37.86%, for a compound annual rate of return of 3.16%. For comparison purposes, from January 1, 1987 to April 29, 1997 (10.323 years), the CREF stock unit value (whose performance closely parallels the S&P 500 with dividends reinvested) has risen 272.10%, for a compound annual rate of return of 13.58%. WARNING: I am a rotten stockpicker. Prices shown are as of April 29.
A. "Phoenix" -real portfolio, begun on October 1, 1995.
SUMMARY - "Phoenix":
Original cost: $ 8,090.45
Present value: $ 7,332.37
Increase: $ -758.08 [-9.37%]
The performance of this portfolio and its predecessors ("Hedger's Delight", "Present and Future Income", "Crapshooter's Folly") from January 1987 to the present is +2.27%, for a compound annual rate of return of 0.27%.
COMMENT on "Phoenix": With the time of the market meltdown drawing near, it's appropriate to discuss what I will do in this portfolio after the crash..... and the answer is, not much. It's simply too small to do any of the sophisticated hedging strategies I like... just liquidate profitable options, if any, and hang onto the cash. But three to six weeks later, prior to the "dead-cat" bounce, I will probably buy LEAP calls and/or warrants, and more Citizens Utilities.
B. "Professors' Investment Group (PIG)" - investment club portfolio.
COMMENT on "PIG": I have been temporarily designated to collect dues and do trades following Fred Fay's death, so I will be able to keep closer tabs on the progress of this portfolio. The PIGs have voted to buy 50 shares of Alkermes, but in signing up to trade on the Internet, I found that Fidelity has apparently lost the paperwork that gave me signature authority over the account, so the shares aren't bought yet. If this isn't straightened out soon I will buy them by phone (10% commission discount) instead of web (25% discount). The PIGs' Web page is at
http://www.assumption.edu/HTML/Faculty/Kantar/WPigs.html.
C. Fidelity IRA - real portfolio, includes commissions:
SUMMARY - IRA:
Original (1983-86) cost: $ 8,326.19
Present value: $17,622.95
Increase: $ 9,296.76 [114.56%]
The performance of this portfolio (including its predecessors) from January 1, 1987 to the present is +60.69%, for a compound annual rate of return of 4.70%.
COMMENT on "IRA": What to do following the meltdown? Well, as in 1987, the rush of the Fed's liquidity will probably prop up the weighted blue-chip averages, even while the rest of the market declines for another few weeks.... so that will be the time to switch into a long-term bond fund (probably one of Fidelity's, at no commission cost) to capture the lowering of interest rates sure to follow the Fed's liquefication. When most stocks bottom a few weeks later, a good candidate to capture the subsequent "dead-cat" bounce will be Rydex Nova, which attempts to track the S&P 500 at a 1.5:1 ratio, even though a commission must be paid. Then we can face the issue of whether the stock market will recover and go on to new highs, as in the years following 1987, or descend into a deflationary collapse, as in the years following 1929.
D. CREF Pension plan; I switch between indexed stock/bond/money funds:
Date Sold Bought
13Mar92 stock @ 56.65 MM @ 13.41
29Apr92 MM @ 13.48 bond @ 31.19
19Jun92 bond @ 32.14 MM @ 13.55
29Jun92 MM @ 13.57 stock @ 56.74
24Jul92 stock @ 56.76 MM @ 13.61
29Oct92 MM @ 13.72 stock @ 58.61
23Dec92 stock @ 61.48 MM @ 13.78
16Jan95 MM @ 14.83 equity-index @ 26.44
20Jan95 eq-index @ 26.19 MM @ 14.84
Values, 28Apr97: stock, 110.70; MM, 16.77
Gain, 1988: 18.91%; 1989: 14.48%; 1990: 8.28%; 1991: 27.93%; 1992: 10.20%; 1993: 3.08%; 1994: 4.07%; 1995: 4.80%
Gain, January 1 through December 31, 1996: 5.28%
Total gain since January 1, 1988 (9 years): 145.96%
Compound annual rate of return: 10.52% (My long-term target: in excess of 15%)
Gain shown excludes the impact of additional monthly cash contributions.
Buying CREF stock on January 1, 1988 and holding it gained 249.17%, for a compound annual rate of return of 14.91%.
G. Current unfilled portfolio good-til-cancelled orders: None.
COMMENT on "Timer's Trend" : The SELL signal given March 18 is still in force, even while the Dow pushes upward to approach its March high. Thus, "Timer's Trend" accurately reflects the fact that most stocks (and probably your favorite non-indexed mutual fund) are in a bear market. This indicator remains solidly bearish.
=============================TIMER'S TREND===========================
Mon 6 Jan 97 . | # | 6567.18 | .+ *
Tue 7 Jan 97 . | . # | 6600.66 |~.+~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed 8 Jan 97 . | # | 6549.48 | .+ *
Thu 9 Jan 97 . | . # | 6625.67 | . + *
Fri 10 Jan 97 . | . # | 6703.79 |~.~+~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Mon 13 Jan 97 . | .# | 6709.18 | . + *
Tue 14 Jan 97 . | . # | 6762.29 |~.~~+~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed 15 Jan 97 . | .# | 6726.88 | . + *
Thu 16 Jan 97 . | . # | 6765.37 | . + *
Fri 17 Jan 97 . | . # | 6833.10 |~.~~+~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Mon 20 Jan 97 . | . # | 6843.87 | . + *
Tue 21 Jan 97 . | . # | 6883.90 |~.~~+~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed 22 Jan 97 . | .# | 6850.03 | . + *
Thu 23 Jan 97 . | .# | 6755.75 |~.~+~~~~~~~~~~~~~~~~~~~~~~~~~
Fri 25 Jan 97 . # . | 6696.48 |~.+~~~~~~~~~~~~~~~~~~~~~~~~~~
Mon 27 Jan 97 . I# . | 6660.69 |*+~~~~~~~~~~~~~~~~~
Tue 28 Jan 97 . | .# | 6656.08 | + *
Wed 29 Jan 97 . | # | 6740.74 | + *
Thu 30 Jan 97 . | . # | 6823.86 |~ +~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Fri 31 Jan 97 . | .# | 6813.09 | .+ *
Mon 3 Feb 97 . | .# | 6806.16 | . + *
Tue 4 Feb 97 . | .# | 6833.48 | . + *
Wed 5 Feb 97 . | #. | 6746.90 | . + *
Thu 6 Feb 97 . | # | 6773.06 | .+ *
Fri 7 Feb 97 . | . # | 6855.80 | .+ *
Mon 10 Feb 97 . | # | 6806.54 | .+ *
Tue 11 Feb 97 . | .# | 6858.11 | .+ *
Wed 12 Feb 97 . | . # | 6961.13 |~.~+~~~~~~~~~~~~~~~~~
Thu 13 Feb 97 . | . # | 7022.44 |~.~~ +~~~~~~~~~~~~~~~~~~~~~~~*
Fri 14 Feb 97 . | . # | 6988.96 | . + *
Tue 18 Feb 97 . | . # | 7067.46 | . + *
Wed 19 Feb 97 . | # | 7020.13 | . + *
Thu 20 Feb 97 . |# . | 6927.38 |~. *+~~~~~~~~~~~~~~~~~~~~~~~~~
Fri 21 Feb 97 . | .# | 6931.62 | .+ *
Mon 24 Feb 97 . | . # | 7008.20 | . + *
Tue 25 Feb 97 . | . # | 7038.21 | .+ *
Wed 26 Feb 97 . | #. | 6983.18 | .+ *
Thu 27 Feb 97 . & . | 6925.07 | .+ *
Fri 28 Feb 97 . I# . | 6877.74 *|~ +~~~~~~~~~~~~~~~~~~~~~~~~~~~
Mon 3 Mar 97 . I .# | 6918.92 | + *
Tue 4 Mar 97 . I .# | 6852.72 |~+~ *~~~~~~~~~~~~~~~~~~~~~~~~~
Wed 5 Mar 97 . | . # | 6945.85 | .+ *
Thu 6 Mar 97 . | .# | 6944.70 | . + *
Fri 7 Mar 97 . | . # | 7000.89 |~.~~ +~~~~~~~~~~~~~~~~~~~~~~~*
Mon 10 Mar 97 . | . # | 7079.39 |~.~~ +~~~~~~~~~~~~~~~~~~~~~~~~*
Tue 11 Mar 97 . | .# | 7085.16 | . + *
Wed 12 Mar 97 . | #. | 7039.37 | . + *
Thu 13 Mar 97 . #I . * | 6878.89 |~. +~~~~~~~~~~~~~~~~~~~~~~~~~
Fri 14 Mar 97 . I #. | 6955.48 | + *
Mon 17 Mar 97 . #I . | 6935.46 |+. *
Tue 18 Mar 97 .# I . {| 6896.56 + . *
Wed 19 Mar 97 .# I . | 6877.68 |-. *
Thu 20 Mar 97 .# I . | 6820.28 |-.~~~~~~~~~~~~~~~~~~~~~~~~~~
Fri 21 Mar 97 . I# . | 6790.06 |~ *~~~~~~~~~~~~~~~~~~~~~~~~~~~
Mon 24 Mar 97 . & . | 6905.25 |-. *
Tue 25 Mar 97 . I# . | 6876.17 |-. *
Wed 26 Mar 97 . I #. | 6880.70 + . *
Thu 27 Mar 97 #. I . | 6740.59 +.~~~~~~~~~~~~
Mon 31 Mar 97 * # . I . | 6538.48 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~
Tue 1 Apr 97 # I . | 6611.05 | .- *
Wed 2 Apr 97 # . I . | 6517.01 |~.~*~~~~~~~~~~~~~~~~~~~~~~~~
Thu 3 Apr 97 #. I . | 6477.35 *~.~~-~~~~~~~~~~~~~~~~~~~~~~~
Fri 4 Apr 97 . #I . | 6526.07 | . - *
Mon 7 Apr 97 . I #. | 6555.91 | .- *
Tue 8 Apr 97 . I# . | 6609.16 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed 9 Apr 97 . & . | 6563.84 |-. *
Thu 10 Apr 97 . #I . | 6540.05 + . *
Fri 11 Apr 97 # . I* . | 6391.69 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~
Mon 14 Apr 97 # I . | 6451.90 | .- *
Tue 15 Apr 97 . I #. | 6578.16 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed 16 Apr 97 . & . | 6679.87 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Thu 17 Apr 97 . #I . | 6658.60 | - *
Fri 18 Apr 97 . & . | 6703.55 |-. *
Mon 21 Apr 97 .# I . | 6660.21 |-. *
Tue 22 Apr 97 . I# . | 6833.59 |-.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed 23 Apr 97 . & . | 6812.72 |-. *
Thu 24 Apr 97 . #I . | 6792.25 |-. *
Fri 25 Apr 97 #. I . | 6738.87 |~-~*~~~~~~~~~~~~~~~~~~~~~~~~
Mon 28 Apr 97 . #I . | 6783.02 |-. *
Tue 29 Apr 97 . I . # | 6962.03 |-.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
=====================================================================
{, } = "Timer's Trend" (4% and 10% exponential) SELL ({) or BUY (}) signal
[, ] = 4% exponential change unconfirmed by 10% exponential (not a signal).
@ = market overbought or oversold. I or & (on baseline) = 10% exponential SELL.
NEXT ISSUE - will appear about May 30.
/Nick Chase