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Have we entered an age of interest rate discontinuity, where past interest rate history has no meaning? Are the current high rates merely a long-lasting hangover from the high inflation of the late 1970’s and early 1980’s? Is it a matter of there being too much of a demand for dollars and not enough supply? NO!

The first week of April brought a lethargic rally in T-bonds, but prices faded fast around mid-month, stabilized for a week and then sold off again at month end.

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After one week of a “neutral” reading in March, our Major Trend Index returned to positive territory the following week. I continue to think a 15%-20% move in popular measures is a good possibility in the next six to nine months.

March was another strong relative month for secondary stocks. We are now operating under the assumption that a significant shift in market character has occurred.

U.S. economic history, as I read it, does not support a contention that higher inflation means a stronger stock market. Some believe inflation may be heating up again, so maybe it is appropriate to provide a remedial lesson.

T-bonds slide 4-5 points in March, with corporates holding up better. Bonds look good, but T-bonds are expected to suffer from renewed inflation fears, dollar weakness, deficit concerns and maybe big foreign selling.

Several years ago, we first published a histogram presenting average annual yields for highest quality U.S. bonds, 1790 to date. However, I wanted to examine historical yield distributions with more precision, presenting average quarterly yields, as well as average annual yields.

Our Major Trend Index has turned positive for the first time in almost a year. We expect a 15%-20% (best guess) move in S&P and DJIA. Secondary stocks should do even better.

February was an outstanding month for many secondary stocks and sectors. Our Emerging Growth quantitative theme turned in the best performance. Smaller technology stocks also did very well, but so did a number of growth consumer issues.

Three weeks on holiday unclutters the mind and clutters the desk. I can’t get excited about New Zealand’s bond market. Yields, while down recently, are still high, but the Kiwi dollar may soon move significantly lower.

This issue we are adding two new sectors to our equity model, one being a conceptual theme (“Buy Texas”) and one a Quantitative Theme based computer screen (“Emerging Growth”).

February was a darn good month for secondary stocks. Most of our measures of secondary stock relative momentum broke their 3-4 year downtrends. We are now operating under the assumption that a significant shift in market character has occurred.

Outside of the 10% move in 30-year zeros (premium widened), the bond market in February was a quiet affair. In terms of the bond market, it was a good month to be on vacation. I didn't miss much.

here is a lot to write about this issue, including a number of equity portfolio changes and shifting sector strategies. But this publication must also uphold a cherished February tradition.

January makes it three months in a row in which the Value Line Index, the NASDAQ Index and most secondary stocks beat the DJIA.

In early December, we sent all clients a list of trading stocks to buy in December and sell in January.

The Brady Commission's study of the October Crash was published this last month.

The NASDAQ Index and the Value Line Index outperformed the DJIA in January and about matched S&P 500 performance.