MARKET INDEX TECHNICAL ANALYSIS - MITA Message Board

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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA

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To: Alex MG who wrote (17133)	5/11/2003 9:10:41 PM
From: Alex MG	Read Replies (1) of 19219

Investors piled a total of $12.9 billion into stock funds in April according to AMG data. This was the largest inflow of cash since the $17 billion in April 2002. The resulting rally has pushed us to new highs. However, the first week in May has only seen an inflow of $1.1 billion to equities and taxable bond funds saw inflows of $3.4 billion. Money Market accounts saw inflows of $13.4 billion. Does anybody see the clue here? Of the nearly $18 billion of cash flowing into investment vehicles only 6% of it actually went into stocks during the week ending May-7th. The money is there and available for instant infusion but the lack of conviction is very apparent. Part of that lack of conviction came from a Goldman Sachs survey of CIOs from large corporations that was announced on Friday. The CIO survey showed they saw no increase in tech spending in 2003 and only a +2-5% increase in 2004. They said the current overcapacity left over from the tech bubble was preventing any need to upgrade. The companies overbought during the height of the tech bubble and the massive layoffs and cutbacks over the last couple years has idled much of that equipment. With excess capacity in every area they said it would take a substantial recovery some time to require new buying. Countering the Goldman Sachs survey Intel President Paul Otellini said that they see strong demand in China and they expect a "slight" recovery in the semiconductor industry this year. He said the Centrino chip had met full expectations and Chinese demand remained strong. This is particularly strange since all other reports out of China are for a sales slump of from -5% to -20% due to the SARS panic. Numerous chip/tech companies have already warned about slower sales and lower earnings. Either those companies are using the SARS ate my earnings excuse now that Iraq is over or Otellini has been inhaling chip dust too long. In predicting a chip recovery he said "the past year has been so bad that the semiconductor sector can only improve this year." I don't know if that is positive or not. If sales were off -50% last year and they gained a "slight" +1% this year that would be an improvement but I don't think investors are thinking in those terms. sentiment results from Investors Intelligence survey shows 56% of newsletter writers are now bullish with only 24.4% bearish... at the market top in March 2000 the rankings were 55.7% bullish and 26.4% bearish. excerpts from asianinvestoronline.com

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