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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 671.91

0.0%

Nov 14 4:00 PM EST

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To: HairBall who started this subject	5/1/2001 2:16:19 PM
From: t2	Read Replies (1) of 99985

The reaction to the NAPM was very encouraging for the bull case. Given the recent good economic news while this one was slightly weaker, one would have expected a sell on the news. That was the test I was watching...and the market has passed, IMHO. (OK..the day is not over yet!) We got negative analyst comments on Dell and AMAT. In addition, I was also incorrect in my interpretation of the Lehman analyst on the telco equipment stocks...it appears they are still bearish on the group. Given all this negative news, how the heck can the Nasdaq be holding up like this...and not going below Nasdaq 2100 except for a few point and only for a very short time. My bullish case factors in what hedge funds may be doing --- probably thinking similarly to what Tod Harrison of realmoney.com has been....betting on a drop. He got so much of the bear market correct and has a lot of credibility. If others have also made the same type of short bets, the case for taking out 2160 is pretty strong...in the very near term...possibly today. If the short covering starts, we could have a big gainer today. Just notice JNPR, a stock in a "fundamentally" weak sector is hitting highs of the day. The move in that stock may itself be signifying short covering as it was the one which had a huge increase in short interest last month...and sticks out in the sector as one that is due for a deterioration of its fundamentals. Of course that is not my bet. The bullish case for it seems very strong for the stock near term (don't have position) Just too much demand for tech stocks, IMHO.

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