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Technology Stocks : Stock Swap

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To: Patrick Slevin who wrote (15815)	11/4/1998 6:48:00 AM
From: Andrew Vance	Read Replies (3) of 17305

AV LATE BREAKING UPDATE Well, it really isn't late breaking but I think a few items need to be addressed before you get to the meat of this newsletter. 1. With the exception of the Philippines and Taiwan Markets, All Asian Markets were up over night. As a matter of fact the Japanese market was up around 4% after US brokerage firm Morgan Stanley Dean Witter analyst Barton Biggs stated Japanese stocks are undervalued and was shifting to a higher asset allocation weighting there. 2. The Democrats picked up a few seats in Congress which should help reduce the probability of impeachment for President Clinton. 3. Qualcomm really impressed the street with its quarterly and fiscal year earnings report and it is being talked up big on CNBC early this morning. Also Boston Scientific is getting a good deal of CNBC press after accounting irregularities in Japan caused stock to be halted yesterday. Looks like the error is in the 10s of millions of dollars. 4. S&P Futures are up 10.70 as of 6 am EST. 5. Bull Run under way in the European Markets this morning but is starting to settle down. We are expecting a nice open to the markets today in the US. Be on guard to take advantage of certain situations as they arise. It looks as if we will have an herd mentality from the open as the herd rushes to stocks. This presents a chance for some artificial run ups leading to more of an overbought condition for some stocks. Do not chase any stock and consider any unexplainable pop in your favorite stocks as an opportunity to sell into the madness. OPENING COMMENTARY FOR NOVEMBER 4, 1998 Is it a coincidence that yesterday's newsletter had no new Scan List items and was extremely light on new stock possibilities, or did the "Over-cautious Bull" think that the elastic was stretched a bit too far in this seemingly rubber band market? I would like to say it was more than a coincidence and look real sharp but the truth is that the select group of stocks over the past 2 weeks were performing much better than I expected and might be getting ahead of themselves. Some of the positive moves were unsupported by the fundamentals and technicals of some of these stocks along with a herd mentality in the face of a mediocre upcoming quarter. The revised and upgraded Radar Scan List was also exceeding my expectations as stocks were performing well ahead of the timeframes I expected. The DOW closed today flat at +0.00 while the technology heavy NASDAQ gave back close to half of its gains on Monday by retracing 12.48 points. Both exchanges traded on heavy volume with the NASDAQ trading 892M shares compared to 704M on the DOW. Of particular concern was the drop in the SOX which registered the steepest decline of the indices we follow, down 2.86% with the AMEX Internet(IIX) and AMEX Networking (NWX) coming in slightly better with losses of 1.88% and 2.31%, respectively. All three of these retreating indices are technology related and very much part of the sector of the markets this advisory covers. SOXX 256.45 -7.55 IXIC 1788.43 -12.48 DJI 8706.15 +114.05 SPX 1110.84 -0.76 OEX 544.25 +0.21 Earnings have continued to come in at a neutral to negative rate, but I continue to see headlines giving hope that the American consumer is still aggressively shopping. This is giving the Bulls a good recent run in the market. Yet, the underlying story seems to be that we are about to enter a slow seasonal selling period and that retail sales are expected to be off this upcoming Holiday quarter.

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