Wednesday, October 25, 2006

For the last two months, Nasdaq short positions set new record highs. (See Oct. 25 WSJ p. C11.) Such extremes often accompany a turning point...in this case a continuation of the last two month's market advance.

2 comments:

Anonymous said...

Deborah,
I enjoyed your book and I enjoy your comments.
Does the inversion of the 1,3,6 month T-bill (secondary market)curve on H-15 give you pause?

Ivan

Deborah said...

Dear Ivan,
It certainly does. Also the inversion between 3 mo. and 10 years. If quality spreads were increasing (an indication that rates in general have peaked), then I'd sell stocks. Quality spreads are narrow so interest rates are too low to cause a recession. Also, the President callled up troops at the end of July. This kind of fiscal stimulus usually drives the stock marekt to new highs...which it has done. Good question.

Best,
Deb