Zeev's Turnips Patch-No Politics (ZEEV)

[phill]

Mr Reserves, re: "What happened to the stock market last year, after that same downward blip?"

Well, now you're changing the subject <g>

The issue I was addressing was your comment "MONEY SUPPLY CRASHING FROM 10% rate of growth to NEGATIVE GROWTH.....CRASH!"

My response was that this blip is perfectly normal - it's people paying their taxes. In fact, it appears to me that it happens annually at the same time for the same reason.

In my desk I keep a copy of the same StL Fed chart, showing the period from October 1999 through December 2000. The reason I keep it is that it shows the early 2000 market crash was (imo) the direct result of extraordinary Fed pumping in fear of Y2K. From 10/99 thru 12/99 the money supply went up more than 10%. Then, in only about 6 weeks in early 2000, 2/3 of that increase was drained back out. The Nasdaq crash followed shortly thereafter.

From mid-March thru mid-April of 2000, however, the money supply also tipped down, as it did last year and this year. Subsequently in 2000, both the money supply and the markets staged a decent summer rally.

So, my answer to your question "What happened to the stock market last year, after that same downward blip?" is that it probably doesn't matter, because the blip appears to be an annual, entirely predictable, event, with no evidence of correlation to the subsequent market action.

best of luck to you,

phill