Replies to post #402916 on Zeev's Turnips Patch-No Politics (ZEEV)

[Sherlock356]

Joe just look at 94/95. Very similar mkt and economic patterns. Rates going up in 94 along with a nervous sideways mkt, and a mild recession end of 04 and early 05. Look at equity returns in 95 and 96. The market looks ahead 9-12 mos. When the Fed is lowering rates the mkt almost ALways does very well. IMO.

[Sherlock356]

Joe a follow up.....take a look at the historic market action when the Fed goes neutral through the first 2-3 rate cuts. Dramatic. Now......the market usually takes a dive towards the end of a tightening cycle before neutrality. Thats what happened in late 94 also....after a spring low and subsequent rally (as we also just experienced this year). If this theory holds, we should have a jittery market with a late summer dump and that could be the entry for a solid rally thereafter with an accomodating Fed. All imo, and outside (political?) events certainly could mess this up.