Weekly Hotline (Nov. 6, 1999)

WSW Hotline - 11/1/1999 By Courtney Smith

I am now bullish. I believe that the low has been set in place and that the market is now at the beginning stages of a bull run that will take it to new all-time highs by the first quarter or sooner. The key to the bear leg has been a tightening of Fed policy caused by fears of higher inflation caused by too strong economic growth. We are now seeing the beginning of the end of these considerations. First, the economy is slowing, mainly in the consumer sector. We are seeing declines in retail sales, durable goods, the very important housing sector, and even in the previously bullet-proof auto sector. This slowdown has been caused by the tight Fed policy of the last 8 months that caused long term interest rates to climb over 1.5%. The price action last week was exactly what I was looking for. I wanted either a sharp downmove or upmove on heavy volume. Last week saw a powerful upmove on heavy volume, including one day with over 1 billion shares on the NYSE! This is the kind of liftoff I was looking for. Put your money now into the stocks in WSW. They will continue to lead the rally. I'm also going to start to recommend some financial stocks that will be in the next issue of WSW. We've waited for several months for the market to stop suffering. I believe that now is the time to buy.