interesting times..., page-8

Heres a post of mine which backs up trade4profits Feb/Mar 09 low prediction.

I typed this post and entered it on another thread before reading t4p's entry, so the fact that both our dates are the same is purely coincidence.



"In regards to the market in general, i made mention in a previous post in regards to studying US interest rates in relation to market tops and bottoms.

And found and interesting correlation.

The first lowering of the US BANK PRIME LOAN RATE / FED PRIME RATE after a succession of increases, is an accurate measure to the top of our market.

Examples:

On 04/01/2001 the rate was cut from a peak 9.5% to 9% and was the ball park top of our market.

On 13/09/2007 the rate was cut from a peak of 8.25% to 7.75% (the first cut since 2004) which was also the ball park top of our market at the time.


Now, in regards to market lows, the first increase in interest rates from the low rate is more of a lagging indicator.

Instead of highlighting the low of a market, it is more of a confirmation that the low has been reached and the market is ready to move forward.

But history suggests that an equity index low around 18 months after the prior peak in interest rates.

Going off the above peak date of 13/09/2007 + 18 months = 13/03/09."