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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 683.47

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Nov 28 4:00 PM EST

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To: Benkea who wrote (35393)	12/18/1999 1:51:00 PM
From: Lee Lichterman III	Read Replies (3) of 99985

>>>We are now fully out of all long positions and are aggressively short this market, particularly the NASDAQ issues<<<< That is one of the things that keeps concerning me. Even though there is all kinds of irrational exuberance out there, there is also a lot of short interest in the high flyers and index puts offestting the lopsided calls on equities. I think until the shorts give up and the put buyers disappear, this could keep going on nothing more than short squeezes. Some of these parabolic moves have to be shorts running for cover. As bobby points out in the post after yours, the Advance decline is starting to act like it could move up. Notice the new highs and new lows the last couple days. The NASDAQ new highs aer declining and the new lows are increasing while the NYSE new highs are creeping up but more importantly the new lows are dropping quickly. Dead cat bounces or a true recovery attempt? We have gone from 570 new lows to only 300+. Not healthy by any bit of imagination but like I said earlier, one more bounce before the drop? The wild cards are the foreign countries not Y2K compliant and the impacts of any failures there. Supply interuptions from Asia, Oil flows stopping from the middle east etc. There were numerous writings about increased inventories in preparation of Y2K but the latest reports I saw actually showed decreases in inventories, this could cause major problems and since news is often delayed it would go nicely for my timeline of mid January pullbacks. Who knows. I found long plays I like today but haven't found many shorts that look like a sure thing. Maybe that in itself is contrary to my thinking and this is the top. <ggg> The over inflated continue to inflate more so they are high risk shorts IMO. PG finally broke when I wasn't looking after I watched it for weeks waiting. GE is signalling now but I know this will be one of the last to fall. CTXS is just begging but this one is tough to time. Also I am not convinced on the Gold stocks. This may be a bearish wedge in the making. I want to see 290 taken out convincingly before jumping. Good Luck, Lee

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