>>you changed your mind from being cautiously bullish to cautiously bearish <<
It is hard to put into words what my outlook is. I am guardedly bullish on the generals/indexes and guardedly bearish on the soldiers. I think the narrowness of the market is continueing but in a more sneaky manner than before. I still think it is a stock pickers market not based on value but based on what people are chasing.
It seems they are making the sector indexes move up with the NDX but they are doing so by only spinning up 2 stocks in each one while dumping others in the same sectors to get the cash to do so. Example retail, buy WMT by using cash from Sears and Albertons, Safeway etc. WMT is more heavily weighted so the index goes up making it look like retail is going up when in reality only WMT is moving up. In this way, the moves seem broad based when in fact they are not.
The stocks that most day traders, swing traders etc follow that are not in the toilet will rally making it appear to us as if this market is healing but value investors won't be able to play along. I will have to run the drill I did this weekend next weekend if the week ends up to see if any of the corporals have joined in. We get excited because the advance decline is less negative than before or the new highs breaks over 100. As low as some of these things have reached, it wouldnt take much if the market truely were to go up in sync, to make these numbers reach in the 400 area or higher. How many stocks ae inthe market? I did see a few double bottms and capitulation bottoms in some of the smaller stocks so I am watching those to see if they want to play also.
I got the OK to post that guys thoughts that e-mailed me so shoot holes in this scenario....
>>>>Possible scenario: Other countries, pacific rim, but in particular Latin
American, Eastern European begin to grasp the gravity of their lack of
preparedness for Y2K. Where can they put their money so that it will be
in the safest place?
So the foreign money begins flooding into the U.S. markets in a big way
from now till the end of the year from all corners of the globe. (every
one trying to cram into that last lifeboat) bonds rally, stocks rally,
and the U.S. institutions use the opportunity to hand the bag to the
third world at the top. Are these guys this good or this lucky?
Foreign investors with lots of money could only find liquidity in the
biggest stocks which are that same group that refuses to go down because
of the lifeboat scenario I just mentioned
on one less order of magnitude (domestic)
That kind of buying with an enforced deadline of 12-31-99 could provide
serious action on the upside in that very same narrow list of stocks.The
irony is that this same group (the Generals) are multi nationals, which
will suffer in numerous ways, yet to be defined, for reasons far beyond
their control or scope of vision.
The market has a blow-off top, then the list of darlings finally gets
drilled, in spades in the spring of 2000. In the mean time, the
secondary list of stocks which are represented by the advance /decline
line finishes makeing their bottom, fixing y2k glitches ect.ect. and
begin to firm up, prepareing to assume some leadership, albeit
tentatively, because of prevailing mkt. conditions. Meantime, it becomes
increasingly apparent to the market how deep the poop is for the
multinationals, as they try to muck their way through the mine field of
multi-national commerce one country at a time, and thats if their own
systems preform flawlessly. Hence the demise of the Generals.
Hey! It could happen! (couldn't it?) <<<<<<
This would tie in our blow off top scenario, the exit plan for the smart money, my outlook for a final top next spring/summer etc etc. This person has managed to link all my outlooks together into a plausable idea. There must be something wrong with it since the market is never this easy <ggg>
Intersted in feedback.
Good Luck,
Lee |
