MARKET INDEX TECHNICAL ANALYSIS - MITA Message Board

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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: J.T. who wrote (10456)	2/15/2002 5:12:48 PM
From: nsumir81	Read Replies (3) of 19219

If FA did lead us lower why were stocks heading down in March April 2000 as earnings were peaking-BECAUSE You said earnings were peaking. Exactly. The market sensed (always anticipates, right?) this and went down ahead of the drop in both earnings and business momentum in March 2000 and of course off a bubble high. I still can not understand why folks still believe in that early 2000 high as something driven by fundamentals/short covering alone. It was driven by an excess of LIQUIDITY which one may count as part of the fundamental (or technical) picture (end of '98 rate cuts and then the Y2K liquidity shot in late '99) that topped off an already ebullient market that had been running for many years. Also mass mania/psychology that fed on itself and the media. The liquidity was gradually removed beginning Feb 2000 and the market responded in kind. This time around the liquidity shot was not so successful (well in terms of percent rise from the lows it was almost as sucessful) because it is in a bear market. In which tremendous overhead has been generated and the 'smart money' can carry it only so far. It was able to carry it up but not sustain it, since it is STILL a bear market. The DOW rallied 2000 pts in a trading range that it has been for the past 2-3 (?) years. (well, almost but the DOW basically has gone nowhere except for dramatic drops outside of and comebacks to within the top of roughly a range of 9500-11500 that is only having a flattish top level and a downward slope to its bottom level if you will) It represents the more 'stable' and 'trusted' stuff that most folks will hold/have held on to even in the face of the tech crash. So it has not suffered as much losses. When folks capitulate on the DOW (if they ever do) then that might mark an end to the bear market. Anyway, just more opinions.

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