Is this this bottom?

Is this the bottom, or just the first leg down?

FIRST, the money numbers are favorable. None of the Ms - M1, M2, of MZM - show any signs of growth above 10% per year. Money is behaving itself after a disatrous decade under Greenspan.

SECOND gold prices have collapsed in the past five weeks from a high above $700 to today's prices below $600.

THIRD Interest rates have started making a bottom in the past five weeks.

FOURTH the stock market has taken a slamming, similar to the one Greenspan caused back in 1987, and it might not be over in stocks.

SUMMARY, managers must be cautious here, cleaning up their books and preparing for the next move.

LOOKING AHEAD

* Short term rates will continue to stay high for the next 6 months

* Long rates will stay below short rates

* Spreads between Treasuries and other instruments will widen

* Keep an eye on gold and money supply

TACTICS

* Lock in profitable long-term fixed spreads

* Hold back on lengthening long-term liabilities

* Let the portfolio contract

STRATEGY

* If gold takes off again, be prepared to lock in long term liabilities.

* If the Fed eases, pay close attention to gold