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Technology Stocks : All About Sun Microsystems
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To: Alok Sinha who wrote (17397)6/27/1999 10:26:00 AM
From: Marvin Mansky  Read Replies (1) of 64865
 
Alok: Your analysis is similar to my thinking. But you know their is strong talk that the economy is slowing on its own (Housing industry is stalled due to high mortgage rates). So, 25 basis points (bsp) are built in to the long bond and the market already at these levels. You see, simply a 25 bsp rise in short term rates may cause a rally in the market. With great earnings, SUNW may trade up beyond 72.

Also, short interest is high right now. This means that a great number of shares of stock are borrowed to support short positions. This is bullish, from both a contrarian standpoint and the fact that upon a bullish event, short covering will artificially accelerate the rise in stocks (especially the ones that are shorted).

Also bullish, volume has been very low last week. Cash has built up and is waiting to pounce on equities.

So Greenspan knows all this too. What will he do?

Bearish factors include, rise in GNP, blip up in inflation, strengthening in Asia and Europe. firming up of oil prices.

I look for this relief rally followed by a drop in August.

Your analysis and predictions are pretty sound in my opinion.

I am in cash for the most part, and am waiting to get more clarity on the direction of interest rates.
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