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Strategies & Market Trends : Waiting for the big Kahuna
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To: Haim R. Branisteanu who wrote (18914)5/21/1998 12:57:00 PM
From: Robert Graham  Read Replies (2) of 94695
 
You make some very interesting observations here, particularly how the market can spike upward on non-events when there is pessimistic sentiment present. I also agree that the market on Friday's tends to move opposite of the predominant trend, perhaps in an uptrend we see profit taking and in a down trend we see short covering. But I do believe that the traders in the market tend to close their positions for the weekend, where there is enough of them doing this to make a difference. With respect to an extended weekend, I think this effect is magnified. This is my unscientific observation over the years.

I agree that we have been in a distribution phase. The funds will need to find a place for their money even if for the short term during this transitional period of the market. I think there has been evidence of where this will be as seen in yesterday's rotation toward the more defensive stocks. This may include additional monies being placed in bonds. Time will tell.

I want to say one thing here. As long as the funds are not stepping up to the plate in purchasing stock through their normal sector rotation efforts, the market will go nowhere. No bull rally of any strength can develop without the participation of fund money. So the "ball" is in the mutual fund's court.

Bob Graham
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