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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 670.92

+0.1%

Nov 7 4:00 PM EST

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To: Haim R. Branisteanu who wrote (39559)	2/9/2000 10:18:00 PM
From: pater tenebrarum	Read Replies (2) of 99985

Haim, we have discussed this on the Clown thread today...i think you're right, one of the reasons the oil cos are being sold is that money is needed to chase the ever higher priced tech stocks. the oil co's have simply become part of the collapsing a/d line (note though that the XOI has hit a support line today). another possible interpretation (a bit more arcane) is that the oil cos are reacting to the inverted yield curve, i.e. that the classic interpretation of the curve inversion as a predictor of an economic slowdown or even a recession is applicable, and the oil stocks are already beginning to discount the expectation of a decrease in future demand for oil. another possibility may be uncertainty over OPEC's March meeting. there's lots of talk that OPEC may decide to increase production quotas (i don't think so btw.). still, the whole thing is rather puzzling and can not really be explained that way...after all, why isn't crude itself discounting this expectation? conclusion: most likely a) applies. a sign that liquidity in the market is harder and harder to come by. regards, hb

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