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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 671.91

0.0%

Nov 14 4:00 PM EST

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To: pater tenebrarum who wrote (18344)	6/23/1999 7:56:00 PM
From: dennis michael patterson	Read Replies (2) of 99985

Heinz, I trade Csco often. As a Naz bellweather, and a very high PE stock, it is subject to interest rate jitters. I bought Csco not long ago at 108 and 110 (54 and 55 pre-split) and sold it today for a handsome profit. What I find odd is that I was able to buy Csco at 110 (55 pre split) and below because of interest rate fears. Csco closed today just below an all-time high, when bonds had returned to the very place that made possible my purchase 8 percent lower. This cannot be explained by any model or formula that correlates prices with rates. Is the current price of Csco just a short-term aberration, one that will quickly be corrected? I don't know. What I do know is that there is a psychological dimension to trading (some?) mega-cap growth stocks that eludes rational analysis. I observe Msft was down on the day, seemingly on the basis of interest rate fears. Alles Gute!

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