How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 490.06

+0.7%

3:59 PM EST

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To: johnd who wrote (27371)	7/26/1999 9:22:00 PM
From: Brian Malloy	Read Replies (3) of 74651

IMHO, I went to 60% cash on Options expiration Friday and have sidestepped a great deal of the down draft of last week and this Monday. I should have shorted the SPX and QQQ but was asleep at the market wheel but with good reason. I expect that we will see a bottoming out this week then some recovery. The key as always is will we bounce off support. If we don't then we go lower. During Mid July on into August I had estimated that we would see maybe two to three cycles of testing and probably breaking old highs to be followed by testing the lows. At this point we are at a bottom and about to begin the second cycle. I believe we will rally but it will be hard to set new highs for the rest of the year. We probably will not see much upside in the third cycle if at all. If Germany and the Europeans are in the process of raising rates then it is easier for our Fed to do the same or so people believe. It is still my position that the long bond will yield under 5.50% by the end of this year. Money flow into equities two weeks ago was 3.1 Billion. Last week it was only 96 Million thus the pull back can be accounted for in large part. Things to think about and uncertainties that will drive the market lower in late summer or the fall. GPS rollover in mid-August, Potential date problems in September , 9999 End of file, 1 Oct 99 Federal gov. switches to FY2000 and the realization late in the year that Korea, Japan and Asia in general are not up to speed for Y2K. And of course, there is always something that comes out of left field and sends people running for the hills. The market just doesn't like surprises. This is now a market that requires greater expertise, people that are new to the investing game should exercise extreme caution...shorting, hedging, selective use of option strategies and going after special situations that provide a high probability of locking in modest profits of say 10-20% over the next four to six months are key. I could be wrong, but this has been my best year in the market. IMHO

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