I said on 24th of Feb that analysts will soon ride the band wagon that they did, what is happenning now has been highlighted over a period of time on Idea.. some of these posts..
This is what we were saying a bit early but timely..
<<Saturday, Feb 26, 2000 3:25 AM ET
Reply # of 31096
<<Today, for the first time I have started hearing analysts questioning Greenspan's interest rate moves. They are not having the desired effect. They will crush the wrong part of the economy.>>
Sandeep.. thanks for this at this end if you go back we have been emphatic about this issue, the analyst will soon ride this growing bandwagon of disillusioned market savvy observers who think AG is not right, he is generalising the whole market cap, he should be little more intelligent than that hurting Buffet or JNJ or AXP will lead us to a severe tail spin which he will not be able to control, the rpoblem is with the issues where money is going now, rising interest rates would hurt vlauation models like NOK or AMZN more than say JNJ or GE or IBM or MSFT, by doing this contradictory statement that internet new economy is immnue to the impact of rising interest rates, he is actually putitng oil on the fire, the new techs issues are roaring and old economy is being crushed, people are selling out and getting in new speculative issues like made and this is the rush which AG due to his absolute 'lack of experience' of markets is harpiung dangerously.
This divergence in Comp and DOW cannot continue it may be crazy but AG will see that old economy stocks are the best hedge agianst market exuberance, by hurting these stocks he going nowhere, gross market cap before his testimony is now moved up although DOW has moved down 600 points, this artificial fake economic model has all the tendencies of pyrmamid disaster, but I can see it I can smell it but who the hell I am, I am enjoying the ride of Oracle's of the world, but who will Oracles of the world will sell to if old economy that produces monies to buy the techs is crushed, if the convertibles and the bonds of the old economy stocks starting to give up, we are in for double whammy, much as I am bull I am one hell of a bull that is my hall mark on certain curves I am little ahead of the bespectled guru, I know that he is getting it wrong, but as I have repeatedly asserted all along 'one should know his size and limitations one can be smart but irrelevent to greater shape of schemes' and as 'I know mine well' the best is just to observe and prepare this is liquidity driven and this can be too dangerous to stand in front off, in markets intellectualism and altruist approaches are big handicaps, we deal here with people who will sell their mothers for a price!
When it gets it to the point where you know that is the 'last straw on camels back' just get on a second earlier, remember that 8 Nov 98 we all thought bonds are going to 150 when they were 135 but at certain point the whole thing becomes unsustainable that is the point trader needs to pick, plus minus few points on percentage basis does not matter.. .. Thanks Sandeep for provoking me otherwise htese thoughts would not have seen the light of the day.. Have to rush for funeral of my close friends Aunt otherwise this could have been a nice dialogue to continue, and you take care.. >>
<<Message #30752 from IQBAL LATIF at Feb 24 2000 5:26AM
UK Ftse's and US Comp's, DOW relationship in rising interest rate environment is the best model one can look at. That is how this market in US is going to act, we have seen consistent rise in rates in UK and market has taken a good correction in stride same will be in US, if I was AG I should have been quite content to see DOW testing 10100 or its nearabout a level of last March, capping expectation is an art this Chairman knows better than anyone else in the town.
I have always highlighted that we will see his tone firmer or lighter depending on his ability to move the markets, 17th he was hawkish yesterday he had olive branch in his hand, this strange mix of carrot and stick forms the core of his strategy, as I have repeatedly pointed out he does not let market run too much ahead of earnings, if DOW is at last year level the one year momentous earnings have all been digested without considerable improvement in the bell weather indicator. Ofcourse argument can be made of Comp relentless run and that test of 50 days MA and 3850 test on NDX is a good sign, we make new highs clean out weaker hands and move on test 1382 resistance now that is the main obstacle, as far we have this strong economy and benign inflationary pressures we may see that few hikes can be digested by the market without catastrphic consequences, we can see as low as 9800 or 1230 area as a result but if NDX stays bid those margin calls based on which avalanche of selling has to materialise may not activate..>>
This is what analysts came out yesterday and joined the bandwagon, what I think in my corner is why can't they think like us, does it take too much moreover is reading market a little ahead is too much, I don't think os, if you read and work on market based on fundamentals you would do well, that what we preach here and teach here.. ..
<<<<The divergence between the Nasdaq and the Dow has dramatically narrowed since the technology pullback began in March. The Nasdaq is up just 2.9 percent in 2000 after Monday's activity while the Dow is off 2.7 percent.
The Standard & Poor's 500 index (^SPX - news) dipped 11.89 points on Monday, or 0.78 percent, to 1,504.46. Meanwhile the 30-year U.S. Treasury bond gained 14/32, pushing the yield down to 5.67 percent from Friday's close of 5.70 percent.
``This rotational switch happens almost daily now and it's probably going to continue that way,' said Barry Hyman, market strategist for Ehrenkrantz, King Nussbaum Inc.
Trading volume was light, which can contribute to volatility in stock prices, market watchers said. On the NYSE, only 854.8 million shares changed hands while Nasdaq logged 1.44 billion shares.
But market watchers noted that they did not believe investors were taking money off the table.
``I don't think cash is coming out of the market. It feels like a rotation,' said Brian Clifford, portfolio manager at SunAmerica Growth Opportunities Funds. ``It seems like it is the same game we played last week.'
Tech sectors dove after market strategists and a top technical analyst recommended moving money out of some highfliers and into more traditional, old economy groups including financials.
Merrill Lynch's chief technical analyst, Richard McCabe, said investors should use rebounds in the prices of tech stocks to reduce their holdings and move into energy, basic-industry, consumer-cyclical and financial stocks.
``It seems like every single analyst on the Street is on the old economy bandwagon and determined to drive the last nail in the coffin of high-flying techs and arrogant investors,' said Charles Payne, head analyst at Wall Street Strategies, an independent market research firm.
``I still like the techs long-term but acknowledge their vulnerability,' he said. ``The wildcard is the financials, which are cheap from a value observation and are building in further rate hikes.'>> |
