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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 690.64

+1.9%

Feb 6 4:00 PM EST

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To: Steve Lee who wrote (80799)	7/24/2001 10:45:51 AM
From: t2	Read Replies (2) of 99985

"On the fund flow front, Trim Tabs said equity funds saw $3.3 billion in redemptions in the three days ending July 19 for a monthly rate of $23.2 billion. This goes back to why the mutual funds keep cash levels that are much greater than what they need for redemptions. They are not forced to sell to meet redemptions..unless it is index funds. I am waiting for some sort of general industry numbers on cash levels in mutual funds as of June 30/2001. I am betting they were up quite a bit based upon the small sample I took yesterday--American Funds and Fidelity.(because these two have lots of funds over 20billion) Outflows while the market has been dropping may not be a bad thing. This money can potentially make its way back in. Seeing realistic high put/call ratio again (after yesterday's odd reading). Does it not seem that the individual investor that was expecting a big rebound has basically given up? That is how I read it. That poll on investor sentiment that I posted yesterday, showing the lowest levels in bullishness in 5 years is telling this story as well. Was enough for me to cover all shorts this morning and go long again...too much pessism for a substantial drop in the Nasdaq, imho. Might as well take my chances on the long side with trading stops.

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