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Technology Stocks : Intersolv News
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To: Michael L. Busser who wrote (1015)8/27/1998 12:36:00 PM
From: Arrow Hd.  Read Replies (1) of 1069
 
I still believe the deal will go through. Neither stock would be
faring any better in this market on their own. MIFGY is down due to
the UK market in general which is being dragged into the general
world-wide problems and, in particular, exposures in Russia and the
potential for additional fall-out in other eastern block countries.
In the past couple of weeks I sold major positions in a number of
companies and today dumped a networking company. I have gone totally
to cash since I believe that there is more negative sentiment to come.
This morning in an early broadcast, there was major lambasting of
Japan's lack of action. Their market is at the brink of breaking
down below major support. So no one is immune for any reason. Just
as there was "irrational exuberance" earlier there is a flow to the
opposite now. We are seeing major deflation. Check out the metals
and other commodities. Cash is still flowing into the market but it
is sitting on the sidelines. We are heading into the earnings
warning season which exaggerates any negative environment since there
are rarely positive advisories only negative ones. I think the large
cap issues (IBM, Intel, MSFT, DELL) within the techs that have held
up may have to capitulate before any major turnaround happens. This
is all very hard to call. Maybe it turns around this afternoon. Who
knows. But in 1987, which I lived through, there were a number of
tremors prior to the major capitulations. The old money is in cash.
It is the new money that is still in the market and nibbling at
these downdrafts as buying opportunities. Anyway, these are just
general comments not directed towards anything in particular in your
post. A lot of technology companies have already broke down within
the small and mid-cap arena. The downdraft is on light volume which
is encouraging to some but we have had bad bear markets in the past
that happened over time on light volume. What is scary is if some of
the technical support levels break and in combination with sentiment
and fundementals we have large volume capitulation. That could be
a draconian downdraft of major proportions. Back to this deal. I
think the 52 week low on MIFGY is now about 32. Recently it was 26.
If it breaks 32 then look for a test at 26 especially if we get
sucked into a black hole here. That will drive ISLI to 12 and change
(still a discount to MIFGY conversion). It will be a screaming buy
but who will have the brass ones to step to the plate? Investing is
a very humbling experience. Good luck to us all.
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