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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 14 4:00 PM EST

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To: pater tenebrarum who wrote (31622)	10/27/1999 11:04:00 PM
From: Fun-da-Mental#1	Read Replies (1) of 99985

Re utilities move up, I think this kind of sector rotation is a faltering step towards rationality in the market, but it doesn't go far enough. The leading stocks take a breather for a while, and money flows into the sectors that have been lagging the most, to relieve the oversold conditions there. However this kind of shift never goes far or lasts long unless the fundamentals in that sector are dramatically improving, such as in the case of the energy sector. There's way too much money in the market right now, and for all that money to be in utilities would be even more ridiculous than for it to be in hi-tech, so people always go back after a few days and buy the dip in the glamour stocks. The only alternative is to move money out of the market. I think of this not so much as sector rotation but as an oscillation back and forth between the leaders and laggards. I think the choice of which laggard is going to be favoured is a bit random and probably manipulated by the market makers. I mean, who knew drugs would be hot last week and utilities this week? Why not the other way around? Fun-da-Mental

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