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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: RR who wrote (9674)	10/26/2000 10:55:40 PM
From: Sully-	of 65232

The OEX Advantage October 26, 2000 Wednesday was ugly but predictable. In the Tuesday report we suggested that traders were finally abandoning recent winners like Extreme Networks (EXTR), Veritas (VRTS), Applied Microcircuit (AMCC) and JDS Uniphase (JDSU). Make no mistake, these stocks are the best bulls have to offer at this time. They are growing revenues fast and they are bonafide superstocks so what does the fact that traders are willing to surrender such stocks say about the health of the current technology sector? The surprise answer to that question is very little. In every stock market cycle there is a point when traders begin throwing-out those stocks with high valuations in favor of issues that have performed more poorly. Some might think this "downgrading" of portfolios is a bad thing but nothing could be further from the truth. The facts are clear, trees do not grow to the sky nor do stocks rise at parabolic rates for extended periods of time. As money "rotates" from expensive stocks to those that are historically cheap the road is paved for a more sustainable advance. We feel this is now happening for the NASDAQ. There is just one problem, in the very near term it may need to get worse before things get better. The reason for this forecast is the fact that the NASDAQ is now very close to what has become key support at 3,050. Both bulls and bears may have already conceded a test of this level. With that in mind, we feel any early advance will meet with selling. In terms of the OEX our new target is the 704 level. ******************************************************************* ABOUT BEDFORD AND ASSOCIATES RESEARCH GROUP Terrence Bedford began his career in the Financial Services Industry managing investment portfolios for wealthy individuals at a major retail brokerage firm. Mr. Bedford left the financial services industry in 1992 to a boutique research firm. In early 1993 Mr. Bedford established Bedford & Associates Research Group. The firm currently publishes a number of internationally distributed investment advisory services decisionpoint.com Courtesy of John Madarasz on the MDD - Market Direction Discussion thread Ö¿Ö

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