Simulation Forecast of 1998  Aug. Russia Default, LTCM impact on Dow Jones Index

1998  Aug 27 's  360 points selloff repeated the previous 300 point plunge as it started July 21, wake up by Greenspan's remarks on overheated US economy and Asian financial crisis. The market speculator bulls ignored Greenspan's numerous warning on the impact of Asian financial crisis impact on the global marco, finiancial, trade, industrial economics, corporate earning and stock prices  He though the the Asian turmoil will provide natural cooloff of the over US stocks and properties. so that he did not have raise the fund rate to push the dollar higher and another wave global currency depreciation crisis . US bulls have use Fed's inaction on interest rate to maintain it upward momentum, since Greenspan first warning at Dow was 6600.

However, There are risks in the hard hit individual industry and stocks as most of the semiconductors stocks was down 50 %, (some rebound recently), some high tech stocks with strong competitive products like IBM, Dell gained 40 %.

This daily global financial markets panic is natural reponse of global central bankers monetary policy to the Asian financial crisis. These relationships have been developed, implemented by me to track last 20 years daily prices with average error below 1.5 %. I accurately predicted my website osawh.com on July 20, when the Dow was 9333 that the US and global markets overheat, is ready for correction due to Yen will go back to 146, Fed fund rate will rebound from 5 % to 5.6 % will took Dow to the 8300 and 8650 consolidation and another wave global stock plunge .The US and global markets did exactly as I predicted.
Recent Russia Ruble tumble 100 % drag down European stock markets and spread into SOuth America. US second quarter GNP already slowndown to 1.5 %  and it will continue recent week consolidation trend Aug. 27 Dow broke 8300 support testing 8000 support, indicating the Bull start looking serious at the Asian turmoil.  Dow will  test the 7800 ands 8050 support  for the weeks ahead. So don't speculate, chase the market, buy high performance high tech, biotech on major setback weakness will help you achieve maximum return at minimum rsiks. visit this site for daily Global financial markets tracking and investment strategy

Warren Huang, Ph.D   Aug. 28, 1998    SF    USA  email whuang@osawh.com