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Technology Stocks : All About Sun Microsystems
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To: Marvin Mansky who wrote (17406)6/28/1999 4:47:00 PM
From: Alok Sinha  Read Replies (2) of 64865
 
Well, my short term prediction of weakness going into the Fed meeting was quite incorrect. The market strength will probably cause the Fed to be more cautious in their statements. I will maintian that a short term correction due to high rates is a matter of WHEN not IF.

A technical analyst on CNBC this morning commented that the absence of any caution or worry among market participants concerns him most about the recent run-up.
People who justified the market valuations (S&P 1300, Dow 10,000) on account of long term bond at 5% continue to justify these levels (at 6%+ 30 yr yield) saying that a 25 (or even a 50 bps) rate increase is factored in the market. I fail to understand how it can be so. Only Abby Cohen in recent weeks has suggested that the market may be about 5% overvalued given movement in bond yields (but immediately added that it could become up to 30% overvalued, so that people don't construe her remarks as negative).

I am not short or in cash. Still 100% in stocks, but more cautious than ever (and hedged with puts on the downside, and covered calls). Also today I closed out a number of my naked out positions that I had entered into during the first week of June (when the markets were reacting negatively to interest rate concerns).

Regards

Alok
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