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Technology Stocks : Netscape -- Giant Killer or Flash in the Pan?
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To: John Ritter who wrote (1906)1/8/1998 2:51:00 AM
From: ahhaha  Read Replies (3) of 4903
 
I don't like stocks right now. I can't tell you why. I smell trouble. There is a good chance for the big OTC and NYSE stocks to get whacked. Under normal conditions that would take an interest rate hike. No evidence of that with the long bond making new highs. This implies that intrinsic deflation is still in place. Meanwhile non-official cpi inflation is breaking out. This means big company narrow margin operations are going to have margin squeezes or already have them. The institutions know this and have been aggresively selling to reduce exposure. The market has been under sustained distribution for more than six months. Psychology has it all propped up. When the psychology goes, the stocks will follow.

These companies could all get a NSCP one day downside break of say, 800 dow points, maybe early February. Simply because of earnings disappointment. We would get a faltering DOW move to 8100 until late Jan, a sell down to 7700, and then the break which would be hard but not decisive. A bounce back up and then more downside grinding. You wouldn't want to get long for months. All high p/e stocks get whacked including AOL, Amazon, and other Yahoos.

This scenario isn't worth much. I build it just to reify my uneasiness. I tell you because even if I'm wrong, and you stay out, you'll have the dough to use for something special that will present itself to you. You must be prepared to accept this opportunity. You must stay out.
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