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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (19068)	7/28/1998 5:06:00 AM
From: IQBAL LATIF	Read Replies (1) of 50167

For me ECI will have a lot of bearing on the overall direction of the market--- ECI is closely watched and their has been some dissent on next move of fed within Fed- the service sector rising wages will need to closely watched it is expected that we will be somewhere near 0.9 but a number above this will initially spook the market-- but the counter argument can go that we are more worried about over capacity than price pressures however even a slightly higher number may not be so detrimental to the market in face of sharp fall in import prices.manufacturing wages are soft and with import prices capping on inflationary possibilites we would even see that a strong ECI which leads to intitial sell off may be an opportunity but this needs to be seen as the details emerges from the number, it is rather premature to make a trade out of the number, but I will lean on a buy if a post number market is trying to bounce off 1139 level.If it ever goes there. Ofcourse a break of 1155 is a signal to higher resistances being checked. I raised on 23 rd July that break of 8982 may lead us to 8806-- we have seen that move but not the level which I think is the real support- I have also seen that most of the selling is in sectors which are non-performing or stocks failing to meet markets expectations this is the best possible news for the market, we have seen that market is now clearly divided into winners and losers and I am expecting that indexes will act kind of differently as stocks within an index trade in new break out ranges and the other laggards in breaking old lows-- like MSFT and Oracle or say INTC TXN compared with LSCC although both are part of SOX but INTC and TXN are trying to go higher as other components of SOX are pulling the SOX ower, same is happening with lot of stocks in different sectors the wining combo tied with a losing pairs. I would think that in circumstances like this if small caps keep heading south we will see that market movement will be restricted to nearly 4 trillion $ cap out of 10 trillion $-- so we may see sharper movement in stocks with good earnings but the indexes will not move with equal pace as they will be tied up with a lot of laggards-- in this market we may need to identify the right stocks and we need to trade within ranges on indexes buying at lower end of the range and selling at the upper end, in such a case we have seen that cue from composite will not be the right thing to do-- we saw huge gyrations in composite without any affect on SPU or little affect--- so we need to identify the indexes which mimic broad market like yesterday I had this problem of seeing my 1822 support being taken out although the move I expected was as low as 1865 I could not do much as SPU barely moved few points the reason being that most of this big move came from seling if internets as I had highlighted earlier and this is like a sword of damocles hanging over composite, anytim we have this selling in huge interent cap sector the market does take a hit but SPU remains unaffected. I will not like the move of market to be restricted to just choicest few stocks that said this is exactly the mode of the market and I would not be surprised if summer rally is restricted to few bell weathers.I will like to see my target of 1155 to be decisively taken out on SPX before being sure of short term direction. I will maintain that SOX remains an attractive sector also DDX is at new lows so is transportation which moved quite decently yesterday after bouncing off confluence of 50 and 200 days MA. I will like to be long above 1155 on SPX or 1163 on SPU on some of these indicators-- TXN and INTC gives me a clear indication of a possible run but caution remains the key a break of 1148 can lead to 1136 and I would like these opportunities to be taken.

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