MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 681.76

-1.1%

Dec 12 4:00 PM EST

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To: KymarFye who wrote (69852)	2/21/2001 3:35:14 PM
From: Doug	of 99985

Kymar: Either the indicator is questionable or else TECHIES must be sector wedded investors. Essentially, there are just 2 main sectors in a Bear market. the AUTOS and the TECHs. The Autos had come thru a glorious cycle and had planned for a downturn extending well into mid 2002. The difference between the Auto and Techs is that Tech Investors are in denial. Because of inflated stock prices , the Techs were forced to go into overdrive mode to maintain earnings/revenues. They used a number of schemes ranging from aggressive accounting, vendor financing, Inventory buy back, Postponed Receivables etc. All those excesses are becoming exposed gradually and have to be regularised. In the next Q, I expect to see many Companies attempt to clean up their books thru write downs, layoffs etc. Once they do that, they are likely to also lower expectations of hyperbolic growth.

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