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Strategies & Market Trends : Tech Stock Options
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To: Tom Trader who wrote (22784)9/11/1997 9:42:00 PM
From: Leland Charon   of 58727
 
TT (and all),

Just thought that I would pass along my observations of the current overall market. I feel that the overall market is heading down pretty substantially over the next several weeks based on the following factors.

-The strong dollar is going to hurt a lot of companies earnings. This coupled with the currency problems in the Pacific Rim will serve as a double whammy.

-There is talk of Greenspan raising rates, probably in November. This will hit the markets very hard.

-The 30 year bond is not reacting well to good news and when REALLY bad news is released the bonds will sell off badly. Tomorrow could be the spark that starts the downside. I don't feel as though a REALLY strong retail sales number is priced into this market. If we get a strong #, look out below.

-Cash inflows into Mutual funds is slowing substantially. I believe the latest data for August showed inflows to be 13.5 Billion down about 50% from the previous month. This tells me that the general public is getting "spooked." Less liquidy for the market spells trouble.

-More and more companies seem to be preannouncing earnings shortfalls. Motorola is a good example. I wouldn't be surprised to see INTC preannounce sometime soon.

-We are coming up on the 10th anniversary of the "crash." I agree that a lot of things are different this time but 1987 is still parked in the back of the small investors mind. It will not take much to spark a big selloff.

-All the so-called gurus seem to be implying that it is OK to "buy the dip." One of these days that philosophy is going to be very costly.

Any and all opinions would be appreciated.

Regards,

Leland
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