SUMMARY - "PIG":
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
Was Wilson prophetic? We now have had 88 years (since 1913) of central-bank creation of money, and as yet the country does not seem to be "ruined" (though some may argue that this has indeed happened, morally).
Yet there are some things that definitely changed with the introduction of a central bank (the Fed) which issues and manipulates the national currency.
The first is the "depression always follows a war" syndrome. In a hard-currency system, it's natural for a recession or depression to follow a major war, because the goods produced during the war boomlet are not enjoyed by consumers, but are destroyed on the battlefield. When the war is over, consumers' savings have been depleted to finance the war effort and the debt incurred to wage war must be repaid, thus there is a shortage of capital to retool and an inability by the public to buy what it wants, even though the desire to do so is present. The recession or depression is a natural correction while the economy "shifts gears" and rebuilds for the prosperous peace which (always) follows. This is even more the case if infrastructure was destroyed during the war.
During the "hard currency" period of the Republic, recessions or depressions followed the Revolutionary War, the War of 1812 and the Civil War (especially in the South). In 1920-21, following World War I, the Fed was young and the currency was still tied to gold, and there was a recession. (Some economists argue that the Great Depression was a delayed reaction to the Great War.)
But following World War II, the widely-anticipated depression (widely anticipated, because people's expectations were based on prior experience) never materialized. Instead, we got the briefest of recessions and an inflationary boom. The economy continued to hum along both during and after the Korean War. The end of the war in Vietnam was also the end of a recession, with 1976-79 being good years economically, in spite of high rates of inflation. And if one counts the Cold War as a "war", its demise in 1989 with the disintegration of the Soviet Union also saw only the briefest of recessions, and that was more tied to the building tensions with Iraq.
It would appear that the Fed's ability to print money on demand (and consequently give us inflation instead of depression) has permanently eliminated the postwar recession/depression. War debts need to be repaid? No problem, just print up the money, consumers will be flush with cash, inflation to follow later.
The second thing that's definitely changed is the purchasing power.... or more accurately, the lack of purchasing power.... of the dollar. During our "hard currency" period.... prior to 1913.... there would be booms and panics, but the mean purchasing power of the dollar remained largely unchanged. (Now there's a pleasant thought to contemplate: Imagine if you could actually save and invest without having to worry about the ravages of inflation or paying taxes on the "phantom income" inflation creates? In the late 19th century, this was the norm; nobody expected inflation to be more than a temporary phenomenon. And we call our present situation "progress"?) Following the inflation of World War I and the stable prices of the 1920s, the Great Depression corrected the general price level to near pre-1913 levels.... no surprise, since gold was still in circulation as money.
But since World War II.... with only paper as legal tender.... the value of the paper dollar has undergone steady erosion: Today's dollar is worth only about $0.04 pre-1913 dollars. The Federal Reserve was established with the intent of averting panics and thus stabilizing the value of the dollar. In this, its primary charge.... maintaining the purchasing power of the dollar.... it has failed miserably. (Today, when people say "no inflation", they mean a nagging 3% residual inflation rate. A century ago.... actually, only sixty years ago.... any statement that 3% was "no inflation" would have been met with howls of laughter.)
The third thing that's definitely changed is that having a central bank allows the government to practice Keynesian pump-priming. Keynes' theory, born of Depression desperation, was that government could pick up the slack and spend (printed or borrowed) money to keep production humming along whenever consumers went into a funk. (Today, we can see that theory has some holes, as experiences of the Great Depression or currently in Japan demonstrate.)
Before the Keynesians could do their thing, though, gold as money had to be taken out of circulation. And it was - it became illegal in 1933 for citizens to hold nonnumismatic gold, along with a dollar devaluation; then the legal ratio of gold backing the paper money was reduced, then eliminated; then in 1971 we no longer honored settling our international transactions in gold; then, today, the central banks depress the price of gold with gold loans and sales to give the illusion that there is no long-term inflation problem.
After all, in a real-money system the bureaucrats would be reduced to borrowing or taxing away gold from one class of people ("rich" investors and businessmen, presumably) in order to give it to another class of people who would be more likely to spend it. Only in a fiat money system is it possible to pursue wealth redistribution without appearing to steal from the rich. (An inverse way of saying this is that socialist schemes depend on fiat money; if the country had a real-money system, the middle-class and rich people whose succor was being stolen from them would buy the politicians of their choice and have them put a stop to it.)
At first the post-1932 Federal Reserve was cautious with its money-printing powers; but after two generations, with no depressions and no recessions more serious than 1975 or 1982, caution has been thrown away. From guaranteeing the soundness of the banking system, the Fed's mandate (whether written or unwritten) has been expanded to bailing out third-world countries, arranging bailouts for derivatives speculators, reflating stocks after a market crash, and keeping market bubbles inflated. So now we have arrived at today's ridiculous situation, where even a mild recession simply cannot be tolerated, and absurdly-overpriced stocks must remain so because so many people have shifted their savings to them.
Implicit in this expanded Fed role, and in the modern economic thought that backs it, is the belief that centralized control by bureaucrats of the international monetary and banking system (and indirectly, the world economy) actually alters consumer psychology, and people will be less prone to panic (in a financial way). Or in other words, printing-press money has forever banished depressions, and modern-day Japan can be offered up as living proof.
Then there are those of us who think human nature changes only very slowly, incrementally
over centuries. While "experts" revel in the joys of a "properly-managed" fiat money system
(yeah, sure), we see the average joe encouraged by "the system" to go deeper and deeper into
hock to keep the economy on an even keel. We have this nagging suspicion that someday the
whole system will crash as penance for this foolishness, hurting even the prudent along with
the stupid. We see people pursuing dreams of wealth which are statistically impossible over
the long term, and shudder. And we wonder how much our own lives and fortunes will suffer
when the (wholly unpredictable) day of reckoning comes. And we wish we could predict the
day when financial Armageddon will arrive, so we can be prepared for it. But we can't, and
we won't be.
Alan Greenspan is firing live ammunition now as opposed to the blanks he was shooting in the early 1990s.... Rapid money growth today is going to push inflation higher, which ultimately will force Greenspan to reverse course and raise interest rates. That will be the economy's coup de grace. - Paul L. Kasriel
250 basis points (or 2.5%) have been lopped off of the Fed Funds rate since the start of this year, which is just amazing considering that unemployment remains below 5% and we aren't even officially in a recession. It is almost as if the Fed is just absolutely terrified over the possibility of a recession and has completely abandoned any concept of future price stability to prevent one. In the past, I have referred to the Fed's actions over the past few months as an experiment, because there really isn't a precedent to what they are doing. The sort of aggressive action that we have seen recently was previously only seen during the truly darkest hours of the U.S. economy. The Fed is betting (or praying) that they can engineer another boom just by going crazy at the liquidity pump without causing debilitating inflation. - Marc Sexton
"Don't Fight the Fed" blows the common sentiment. The odds favor the Fed, it is believed. Because easy money has to go somewhere... and because stocks rise more often than they fall anyway. The Fed, clearly committed to cutting rates until the economy turns around, seems to be offering investors a no-lose wager. If at first the Fed's cuts fail to boost stock prices... Greenspan will try, try again - and keep trying until the market finally responds. And yet, anyone betting on government bureaucrats to win the War on Poverty, the War on Drugs, or any of its other wars since 1945 would have found himself on the losing end of the wager. Even the Fed itself has a reliable record. Charged with protecting the currency, it has done the exact opposite. In the 100 years preceding the creation of the Federal Reserve System, the dollar went up and went down, but it ended the period about where it began, worth as much in 1913 as it was in 1813. Since then, thanks to the Fed's management, it has lost 95% of its value. Having failed so miserably, the Fed has done just what every government agency seeks to do - expand its mandate. Now, the Fed has taken on the job of managing the economy as well as the currency. Mr. Greenspan believes, at least publicly, that the Fed can manipulate key interest rates and keep the economy expanding almost eternally. And the public believes it, too. - Bill Bonner
The clear and present danger is that the chairman, being mortal, will miscalculate. It has happened before. Perhaps, he.... has underestimated the strength and the persistence of domestic inflation. Perhaps, by overstimulating, the Fed will push bond yields and mortgage rates higher. Possibly, by perpetuating a belief in the Federal Reserve's capacity to control essentially uncontrollable events, Greenspan will embolden American investors and precipitate even greater market losses. - James Grant
It's been a marvelous party. It was wonderful to hear gay laughter at the joy of being wealthy, and feel the balmy breezes wafting the sound of tinkling crystal, toasting the arrival of all the material things one could want. Everyone (well, a few people, anyway) knew the party would end at some point, and that the Black Horsemen would ride in and totally destroy the place. But there were no hands on the clocks. How could anyone tell? Surprisingly, since it's such a huge party, by far the biggest in history, encompassing fully half the inhabitants of the US, it's going to take a while for the crowd to panic. Most people think that the rent-a-cops, in the form of Alan Greenspan and Baby Bush will shoo the Horsemen away; I think not. Worse, the March decline was just a probe so far; the second and third waves are yet to arrive. And they're not going to take any prisoners. Drop your champagne glass, and run. - Doug Casey
I may be wrong, but the recent degree of willingness to jump back in, particularly into the same hot stocks that caused the problems in the first place, has been a confirming sign to me that, while I called for a significant rally, odds remain high that it's only a bear-market rally that will end as the market's unfavorable seasonal period takes over. - Sy Harding
I like bubbles. You can make lots of money very quickly when a bubble is inflating, as long as you get out just before it bursts. As of yesterday's [May 16] close, the S&P 500 was 25% overvalued based on the Fed's Stock Valuation Model.... Five more percentage points and the market will be as overvalued as it was just before the 1987 crash, though it would still be cheaper than at the start of last year when it was 70% overvalued. But that was Bubble I. Bubble II may surpass the 1987 overvaluation, but I suspect it will burst somewhere below the 70% level.... The Fed is certainly our friend. However, true friends don't let their friends drink and drive. I would prefer an earnings-driven bull market rather than a liquidity-driven one. For now: May the bubble be with you! - Ed Yardeni
During most speculative manias, only a minority of high-risk rollers participate. There tends to be a mainstream scepticism of the gambling and the revelry associated with the stock market "party". Usually risk-averse households remain sceptical and stay away. Society's staid elders tend to frown. We saw this in 1928-1929 when the Federal Reserve under Governor Benjamin Strong repeatedly warned about the dangers of stock market speculation. By contrast, in this bull market, despite valuations that vastly exceed those of the peak in 1929, or those of Japan in 1989, all of society has been onboard: a cheerleading media on CNBC, captains of finance and industry (whose own behaviour increasingly reflects a trend of stock prices driving corporate activity, rather than being a mere reflection of it), the Secretary of the Treasury, the Chief Executive, and even the Chairman of the Federal Reserve whose accounts of the technological wonders and subsequent efficiencies of the "new era" have significantly outnumbered his occasional misgivings about valuation. This widespread social benediction of the bull market in stocks has led an unprecedented number of otherwise risk-averse households to commit an unprecedented proportion of their assets to the stock market, and let the market do their saving for them. - Marshall Auerback
Credit card debt is the most expensive credit available - why would people take on more of it, especially when unemployment is rising? Answer: because they have to. Consumers are using credit card debt to help make ends meet. And they are also cutting back on spending. The savings rate rose from minus 1% in February to minus 0.8% in March. Not exactly Japanese-level. But it could be an important harbinger of things to come. - Bill Bonner
Last month, we found out that average hourly earnings are growing at 4.3% year- over-year, the fastest pace since May 1998. We also discovered that the Cleveland Fed's median CPI is rising at a 3.4% year-over-year rate - its fastest growth since February 1996. Now add the knowledge that the funds rate has dropped by two full percentage points in less than four months, that real short-term interest rates are lower than they have been at any point since the spring of 1994, that the M-2 measure of the money supply is already growing at 8.2% (on a year-over-year basis), and then answer me this: Should the Fed be (a) less concerned about inflation than it was in November, (b) just as concerned, or (c) more concerned? I'm coloring in the (c) oval on my answer sheet, and I can probably even talk myself into changing it to (b) if I see the smart girl in front of me picking it. - James Padinha
I'm getting the first whiffs of a major change. I can see it on the charts - just little burps so far - but important ones. Everything is pointing in the same direction - commodities, currencies, gold shares, interest rates, energy prices, unemployment, consumer spending - economic stagnation and rising prices - especially prices of commodities. Stagflation, in other words. - Harry Schultz
Logic and Austrian theory suggest that the severity of recessions is broadly proportionate to the magnitude of the excesses and maladjustment that developed during the boom. Accordingly, the inevitable recoil will be inherently be a lot worse.... The U.S. economy is in the early stage of a recession that will prove unusually severe and long. - Kurt Richebacher
Consumers enjoyed boom times, during the late '90s, with plentiful jobs and rising asset prices. There was no shortage of people ready to borrow money to buy a house.... But.... they were especially good for Fannie and Freddie. Fannie Mae, for example, saw her net income rise 500% and assets increased nearly as much.... Thanks to the safety net, and an implied government guarantee, Fannie's equity to asset ratio is only 3%. Six months ago, Gene Spencer, speaking for Fannie, explained to Grant's that "Losses are at historically low levels. For that reason, credit risk is not a real issue for us at this point." But conditions that were once ideal might be reasonably expected to be less-than-ideal at some point. Homeowners might lose their jobs and be unable to make mortgage payments. Home prices might go down rather than up. Even if housing prices fell by 5% nationwide, says Fannie, it would only mean a 'gross credit loss' of $1.065 billion. Laying off most of the loss on counter-parties, or hedges, Fannie would still survive. But what if housing prices fall more than 5%? And what if the hedging institutions are in trouble themselves? Ultimately, the taxpayer will pick up the bill.... [Warren] Buffett sold his Fannie Mae shares last year, saying only that he could not calculate the risk. I cannot calculate the risk either, but my guess is that it is more than most people think. - Bill Bonner
A central feature of Japan's psychology is refusal to accept defeat. For Japan, not so long ago a courageous warrior nation, the samurai code of personal honor, public face, and clan loyalty remain important. In one of history's most remarkable events, Japan abandoned medieval feudalism in 1871 and transformed itself in a few decades into a modern industrial society. The samurai, Japan's warrior caste, put away their swords and went to work as government officials and, later, leaders of major corporations. Japan's big companies became replicas of the old feudal clan structure, where the most prized virtues were loyalty, cooperation with other members, and placing the group above individual interests. Japanese workers were not employees; they were soldiers who served the clan and their lord for life; in return, they were given financial security, prestige, and a sense of belonging. Companies did not compete in the western sense: they did battle and formed temporary alliances, just like warring samurai armies during Japan's feudal age. To Japanese corporate leaders, public admission of catastrophic business failures and firing large numbers of workers would be a profound disgrace.... Any major housecleaning of Japan's bankrupt business and financial sectors must inevitably mean massive layoffs and a sharp increase in unemployment, perhaps as high as 7-8%, figures Japanese find horrifying. - Eric Margolis
One reason that Jefferson, or for that matter Zola or Balzac or any of these great figures of
the 18th and 19th centuries got so much done, so much more done than people today, is that
they didn't have any time-saving or labor-saving devices.... If Jefferson were alive today - he'd
never finish answering the e-mail. - Tom Wolfe
Don't look down, but we're at that 4% edge. Bank CD rates are nudging under 4% (and if you have a passbook-type account, forget it. Rates have been under 4% for some time now). Short-term government bonds are near 4%, and longer-term rates, though still over 5%, continue to edge downward.
No, Nick, you say, it can't be true. We couldn't possibly get another financial bubble so soon after the demise if the Internet and tech-stock craze on the NASDAQ. Well, I say, historically the odds are against it, but there is precedent for it. After the tech ("-onics") and conglomerate stocks collapsed in the 1970 bear market, we did get the "Nifty Fifty" craze in 1972-73.
Look at it this way: You're Joe Saver. Your bank CD is up for renewal and at the new interest rate, the return on your money won't amount to squat. In your statement savings account, after inflation you are effectively supporting the bank to rob you blind. (Thanks, Al.) Money market funds don't look much better. Then there are stocks. They returned 15%-plus from 1982 through 1999. Sure, 2000 was an ugly year, but it wasn't even a bear market (or, at least so the talking heads on TV would have you believe), and stocks look like they're headed up again. And the Federal Reserve won't let stocks go down, too many people have too much money in them.
So, the choice for Joe Saver is: Bank savings, low rate of return, guaranteed by the Fed, perfectly safe. Stock market, high rate of return, maybe a little volatile but high prices guaranteed by the Fed, looks perfectly safe. There's a choice here? This is a no-brainer.
However, should a bubble of magnitude similar to the one which just popped appear, it won't be in the stuff.... primarily Internet stocks.... which led the charge the last time. It will be in stocks which suffered the least in the 2000-2001 bear; remember, Joe Saver still wants his money to be safe, and these will appear to be the safest. A bubble in "value" stocks (which will, of course, no longer have value when bubblemania strikes)? Don't be surprised if it happens.
Meanwhile, we have unbelievably strong crosscurrents and riptides in the markets. A very strong trend of asset deflation and debt defaults is being bucked by Uncle Al and his Wondrous Money-Making Machine. The money supply is expanding at double-digit rates, a printing-press effort that happens only every decade or two, and which we haven't seen of this magnitude since 1982-83. (Goddammit, we will not have a recession! - Fed.)
I think historical precedent will prevail and the Fed will win out over the dark forces of
deflation this time, too. But it takes awhile for the crosscurrents to calm and the new trend to
become clear, so I remain just modestly bullish on stocks into the fall, with the real gains to
come in 2002 and, possibly, 2003. Happy thirtieth anniversary, Nifty Fifty!
Original cost (adjusted): $ 4,998.21
Present value: $ 4,339.15
Increase: $ -659.06 [-13.19%]
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 -1.65%, for a compound annual rate of return of -0.09%. COMMENT on "Phoenix": There is no change since the last issue
B. "Professors' Investment Group (PIG)" - investment club portfolio.
SUMMARY - "PIG":
Original cost: $ 9,024.00
Present value: $15,719.16
Increase: $ 6,695.16 [+74.19%]
COMMENT on "PIG": I still have not yet bought the $1000 worth of a mutual fund holding Japanese stocks.
The PIGs' Web page is at
http://www.assumption.edu/HTML/Faculty/Kantar/WPigs.html
C. Roth rollover IRA - real portfolio, includes commissions:
SUMMARY - IRA:
Original (1983-86) cost: $ 8,326.19
Present value: $11,337.35
Increase: $ 3,011.16 [+36.16%]
The performance of this portfolio (including its predecessors)
from January 1, 1987 to the present is 3.38%, for a compound
annual rate of return of 0.23%.
D. CREF Pension plan; I switch between indexed stock/bond/money funds:
Date Sold Bought
13Mar1992 stock @ 56.65 MM @ 13.41
29Apr1992 MM @ 13.48 bond @ 31.19
19Jun1992 bond @ 32.14 MM @ 13.55
29Jun1992 MM @ 13.57 stock @ 56.74
24Jul1992 stock @ 56.76 MM @ 13.61
29Oct1992 MM @ 13.72 stock @ 58.61
23Dec1992 stock @ 61.48 MM @ 13.78
16Jan1995 MM @ 14.83 equity-index @ 26.44
20Jan1995 eq-index @ 26.19 MM @ 14.84
30Oct1997 MM@ 17.24 bond@47.56 (27.17%)
30Oct1997 MM@ 17.24 i-i bond@26.12 (27.17%)
11Feb1998 bond@ 48.84 MM@17.52 (27.17%)
11Feb1998 I-I bond@ 26.23 MM@17.52(27.17%)
16Jun1998 MM@ 17.84 TIAA Traditional (45.87%)
23Sep1999 MM@18.99 I-I bond@27.56 (53.32%)
17-18May2000 rate adjustment to 7.25% in SRA
12-13Jul2000 rate adjustment to 7.5% in SRA
8Jan2001 TIAA Traditional bond@58.62 [22.77%]
8Jan2001 TIAA Traditional eq-idx@75.79 [4.56%]
1Feb2001 i-i bond@31.78 eq-idx@80.84 [26.76%]
Values, 31May2001: stock, 177.41 equity-index, 74.43 MM, 20.86; bond, 59.52; inflation-indexed bond, 33.17; TIAA current yield in SRA, 7.5% (new money at 6.5% through June 30, 2001)
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%; 1996: 5.28%; 1997: 5.38%; 1998: 5.72%; 1999: 5.12%; 2000: 9.99%
Gain, January 1 through March 31, 2001: -2.10%
Total gain since January 1, 1988 (13.25 years): 210.19%
Compound annual rate of return: 8.92% (My long-term target: in excess of 10%)
Gain shown excludes the impact of additional monthly cash contributions.
Buying CREF stock on January 1, 1988 and holding it gained
426.15%, for a compound annual rate of return of 13.36%.
COMMENT on NYSE "Timer's Trend":
We currently have a BUY signal on April 18, 2001.
____________________________ NYSE TIMER'S TREND _______________________________
Mon 29 Jan 01 . | . # |10702.19 | . + *
Tue 30 Jan 01 . | . # |10881.20 | . + *
Wed 31 Jan 01 . | . # |10887.36 | . + *
Thu 1 Feb 01 . | . # |10983.63 |~.~~+~~~~~~~~~~~~~~~~~~~~~~~~~*
Fri 2 Feb 01 . | # |10864.10 | . + *
Mon 5 Feb 01 . | . # |10965.85 | . + *
Tue 6 Feb 01 . | . # |10957.42 | . + *
Wed 7 Feb 01 . | # |10946.72 | . + *
Thu 8 Feb 01 . | .# |10880.55 | . + *
Fri 9 Feb 01 . | # |10781.45 | . + *
Mon 12 Feb 01 . | . # |10946.77 | . + *
Tue 13 Feb 01 . | .# |10903.32 | . + *
Wed 14 Feb 01 . | # |10795.41 | . + *
Thu 15 Feb 01 . | . # |10891.02 | . + *
Fri 16 Feb 01 . |# . |10799.82 | .+ *
Tue 20 Feb 01 . |# . |10730.88 | + *
Wed 21 Feb 01 . & . |10526.28 |~+~*~~~~~~~~~~~~~~~~~~~~~~~~
Thu 22 Feb 01 . & . |10562.61 |+. *
Fri 23 Feb 01 . #I . |10441.90 + . *
Mon 26 Feb 01 . I . # |10642.53 |+. *
Tue 27 Feb 01 . I # |10636.88 |+. *
Wed 28 Feb 01 . I .# |10495.28 | + *-------------------
Thu 1 Mar 01 . I# . |10450.14 | + *
Fri 2 Mar 01 . | .# |10466.31 | .+ *
Mon 5 Mar 01 . | . # |10562.30 | .+ *
Tue 6 Mar 01 . | . # |10591.22 | . + *
Wed 7 Mar 01 . | . # |10729.60 | . + *
Thu 8 Mar 01 . | .# |10585.25 | . + *
Fri 9 Mar 01 . | . # |10644.62 | . + *
Mon 12 Mar 01 #. I . |10208.25 | .+ *
Tue 13 Mar 01 . & . |10290.80 | + *
Wed 14 Mar 01 #. I . {| 9873.46 |*+.~~~~~~~~~~~~~~~~~~~
Thu 15 Mar 01 . I #. |10031.28 + . *
Fri 16 Mar 01 #. I . | 9823.41 | - *
Mon 19 Mar 01 . I # | 9959.11 |-. *
Tue 20 Mar 01 . & . | 9720.76 |-. *
Wed 21 Mar 01 #. I . | 9487.00 |-.~*~~~~~~~~~~~~~~~~~~~~~~~~
Thu 22 Mar 01 # . I . | 9389.48 | .- *
Fri 23 Mar 01 . I # | 9504.78 |-. *
Mon 26 Mar 01 . I . # | 9687.53 |-. *
Tue 27 Mar 01 . I . # | 9947.54 + . *
Wed 28 Mar 01 . #I . | 9785.35 |+. *
Thu 29 Mar 01 . & . | 9799.06 | + *
Fri 30 Mar 01 . I # | 9878.78 | + *
Mon 2 Apr 01 . #I . | 9777.93 |+. *
Tue 3 Apr 01 # . I . | 9485.71 | - *
Wed 4 Apr 01 .# I . | 9515.42 | - *
Thu 5 Apr 01 . I . # | 9918.05 |-. *
Fri 6 Apr 01 #. I . | 9791.09 | - *
Mon 9 Apr 01 . I # | 9845.15 |-. *
Tue 10 Apr 01 . | . # |10102.74 |+.~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Wed 11 Apr 01 . & . |10013.47 | + *
Thu 12 Apr 01 . | # |10126.94 |+. *
Mon 16 Apr 01 . I #. |10158.56 | + *
Tue 17 Apr 01 . | .# |10216.73 | .+ *
Wed 18 Apr 01 . | . # }|10615.83 |~.+~~~~~~~~~~~~~~~~~~~~~~~~~~*
Thu 19 Apr 01 . | .# |10693.71 | . + *
Fri 20 Apr 01 . # . |10579.85 | .+ *
Mon 23 Apr 01 . # . [|10532.23 | .+ *
Tue 24 Apr 01 . | #. |10454.34 | + *
Wed 25 Apr 01 . | . # ]|10625.20 | + *
Thu 26 Apr 01 . | . # |10692.35 | + *
Fri 27 Apr 01 . | . # |10810.05 | . + *
Mon 30 Apr 01 . | . # |10734.97 | . + *
Tue 1 May 01 . | . # |10898.34 | . + *
Wed 2 May 01 . | .# |10876.68 | . + *
Thu 3 May 01 . |# . |10795.65 | . + *
Fri 4 May 01 . | . # |10951.24 | . + *
Mon 7 May 01 . | .# |10935.17 | . + *
Tue 8 May 01 . | # |10883.51 | .+ *
Wed 9 May 01 . | # |10866.98 | .+ *
Thu 10 May 01 . | . # |10910.44 | . + *
Fri 11 May 01 . | # |10821.31 | .+ *
Mon 14 May 01 . | . # |10877.33 | .+ *
Tue 15 May 01 . | . # |10872.97 | . + *
Wed 16 May 01 . | . # |11215.92 |~.~~+~~~~~~~~~~~~~~~~~~~~~~~~~~*
Thu 17 May 01 . | . # |11248.58 | . + *
Fri 18 May 01 . | . # |11301.74 @| . + *
Mon 21 May 01 . | . # |11337.92 @| . + *
Tue 22 May 01 . | .# |11257.24 @| . + *
Wed 23 May 01 . |# . |11105.51 | . + *
Thu 24 May 01 . | # |11122.42 | . + *
Fri 25 May 01 . | #. |11005.37 | .+ *
Tue 29 May 01 . | #. |11039.14 | + *
Wed 30 May 01 . #| . |10872.64 |+. *
Thu 31 May 01 . | . # |10911.94 | + *
========================================================================
COMMENT on NASDAQ "Timer's Trend": We currently have a really waffling SELL signal on May 30, 2001. I would, at the moment, rate the NASDAQ as dead neutral. It is obviously still much weaker than the NYSE.... all those folks burned by buying tech stocks at too-high prices must be trying to get out with each opportune upward bounce.... so if you're bullish, stick with value holdings. The NASDAQ is telling us that the techs should still be avoided.
____________________________ NASDAQ TIMER'S TREND ____________________________
Mon 29 Jan 01 . | . # | 2838.34 | . + *
Tue 30 Jan 01 . | .# | 2838.35 | .+ *
Wed 31 Jan 01 . | # | 2772.73 | .+ *
Thu 1 Feb 01 . | .# | 2782.79 | . + *
Fri 2 Feb 01 . # . | 2660.50 | .+ *
Mon 5 Feb 01 . |# . [| 2643.21 | + *
Tue 6 Feb 01 . | .# | 2664.49 | + *
Wed 7 Feb 01 . #I . {| 2607.82 |+. *
Thu 8 Feb 01 . I# . | 2562.06 |+. *
Fri 9 Feb 01 # I . | 2470.97 +~.~*~~~~~~~~~~~~~~~~~~~~~~~~
Mon 12 Feb 01 . I #. | 2489.66 + . *
Tue 13 Feb 01 . #I . | 2427.72 |-. *
Wed 14 Feb 01 . I #. | 2491.40 + . *
Thu 15 Feb 01 . I . # | 2552.91 |+. *
Fri 16 Feb 01 # . I . | 2425.38 + . *
Tue 20 Feb 01 # . I . | 2318.35 |-. *
Wed 21 Feb 01 # . I . | 2268.94 |~-~*~~~~~~~~~~~~~~~~~~~~~~~~
Thu 22 Feb 01 #. I . | 2244.96 | .- *
Fri 23 Feb 01 # I . | 2262.51 | . - *
Mon 26 Feb 01 . I #. | 2308.50 | .- *
Tue 27 Feb 01 # . I . | 2207.82 | .- *
Wed 28 Feb 01 #. I . | 2151.83 | .- *
Thu 1 Mar 01 .# I . | 2183.37 | .- *
Fri 2 Mar 01 # . I . | 2117.63 | .- *
Mon 5 Mar 01 . & . | 2142.92 | . - *
Tue 6 Mar 01 . I .# | 2204.43 | - *
Wed 7 Mar 01 . & . | 2223.92 |-. *
Thu 8 Mar 01 # I . | 2168.73 |-. *
Fri 9 Mar 01 # . I . | 2052.78 |~-*~~~~~~~~~~~~~~~~~~~~~~~~~
Mon 12 Mar 01 # . I . | 1923.36 | .- *
Tue 13 Mar 01 .# I . | 2014.78 | . - *
Wed 14 Mar 01 # . I . | 1972.09 @| . - *
Thu 15 Mar 01 # . I . | 1940.71 @| . - *
Fri 16 Mar 01 # . I . | 1890.91 @| . *-
Mon 19 Mar 01 .# I . | 1951.18 | . - *
Tue 20 Mar 01 # . I . | 1857.44 @|~.~*~-~~~~~~~~~~~~~~~~~~~~~~
Wed 21 Mar 01 # . I . | 1830.23 @| . - *
Thu 22 Mar 01 # I . | 1897.70 | . - *
Fri 23 Mar 01 .# I . | 1928.68 | . - *
Mon 26 Mar 01 # I . | 1918.49 | . - *
Tue 27 Mar 01 . & . | 1972.26 | .- *
Wed 28 Mar 01 # . I . | 1854.13 | . - *
Thu 29 Mar 01 # . I . | 1820.57 | . - *
Fri 30 Mar 01 . #I . | 1840.26 | . - *
Mon 2 Apr 01 # . I . | 1782.97 | . - *
Tue 3 Apr 01 # . I . | 1673.00 @|~.~~*~-~~~~~~~~~~~~~~~~~~~~~
Wed 4 Apr 01 # . I . | 1638.80 @| . - *
Thu 5 Apr 01 . I #. | 1785.00 | . - *
Fri 6 Apr 01 # . I . | 1720.36 @| . - *
Mon 9 Apr 01 .# I . | 1745.71 | . - *
Tue 10 Apr 01 . I # | 1852.03 | .- *
Wed 11 Apr 01 . I #. | 1898.95 |-. *
Thu 12 Apr 01 . I # | 1961.43 |-. *
Mon 16 Apr 01 # I . | 1909.57 + . *
Tue 17 Apr 01 . & . | 1923.22 |+. *
Wed 18 Apr 01 . | . # | 2079.44 |+.~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Thu 19 Apr 01 . | . # | 2182.14 | + *
Fri 20 Apr 01 . | #. | 2163.41 | + *
Mon 23 Apr 01 # | . | 2059.32 | + *
Tue 24 Apr 01 . #| . | 2016.61 |+. *
Wed 25 Apr 01 . | .# | 2059.80 |+. *
Thu 26 Apr 01 . # . | 2034.88 + . *
Fri 27 Apr 01 . | .# | 2075.68 + . *
Mon 30 Apr 01 . | . # }| 2116.24 | + *
Tue 1 May 01 . | . # | 2168.24 | . + *
Wed 2 May 01 . | . # | 2220.60 | . + *
Thu 3 May 01 . # . | 2146.20 | . + *
Fri 4 May 01 . | . # | 2191.53 | . + *
Mon 7 May 01 . | #. | 2173.57 | . + *
Tue 8 May 01 . | . # | 2198.77 | .+ *
Wed 9 May 01 . |# . | 2156.63 | + *
Thu 10 May 01 . | #. | 2128.86 | .+ *
Fri 11 May 01 . | #. | 2107.43 | + *
Mon 14 May 01 . |# . | 2081.92 | + *
Tue 15 May 01 . | # | 2085.58 |+. *
Wed 16 May 01 . | . # | 2166.44 | + *
Thu 17 May 01 . | . # | 2193.68 | .+ *
Fri 18 May 01 . | .# | 2198.88 | .+ *
Mon 21 May 01 . | . # | 2305.59 | . + *
Tue 22 May 01 . | .# | 2313.85 | . + *
Wed 23 May 01 . |# . | 2243.48 | . + *
Thu 24 May 01 . | . # | 2282.02 | . + *
Fri 25 May 01 . | # | 2251.03 | . + *
Tue 29 May 01 . # . | 2175.54 | + *
Wed 30 May 01 # I . {| 2084.50 |+. *
Thu 31 May 01 . I . # ]| 2110.49 | + *
========================================================================
"Timer's Trend" is based on 4% and 10% exponential moving averages of the New York Stock Exchange or NASDAQ advance/decline lines (that is, the ratio of advancing to declining stocks). There are many symbols shown above, but the ones that count are the braces: NEXT ISSUE - will appear about June 30. /Nick Chase