Tuesday, March 06, 2007

I prefer to use fundamental analysis. Although some technicals (VIX, Put/Call, Odd-lot Shorts) are screaming "Buy!", I give more weight to quality spreads and Fed Funds rates which are pessimistic.

4 comments:

Anonymous said...

As a technical analyst, this will be an interesting test of our competing philosophies. Yes, I'm seeing the "buy" signal in VIX, et al, but this correction has not clearly changed course. This "feels" like 2004 with its hints of a slowdown that did not materialize. It did result in three waves of selling however, starting in March and ending in the late summer.

Deborah said...

I hate correctons but must agree with you that this one does not "feel" like it has changed course. My "feel" depends on the quality spread, Fed Funds rate and inverted curve.

Let's hope this correcton is short and not very painful. Deb

Anonymous said...

Deborah,

The high-yield/10yr. spread narrowed some yesterday (Tuesday 03-06),...what will it take on this spread to turn you bullish?, or bearish?

Same question for Fed Funds rate?

Will a 70% likely Fed ease be viewed as bullish for the market?, or be viewed as bearish, ...i.e. necessary because the economy is too weak, and earnings are struggling?

Thanks, Jim P.

Deborah said...

Dear Jim,
Great questions. Yes to both. A narrower quality spread is good for stocks as is Fed easing.
Best,
Deb