The SPX
I've spent some time tonight looking at the mutuals and the SPX charts. Here is a brief history:
Starting in Jan 97, the market rose about 10% and corrected down 8%
From April 97 through July of 98 the SPX rose in three runs with two
horizontal corrections that lasted 6 and 3 months, for a 60% gain.
Beginning Mid July through October 8, 1998, the market fell, with one bounce, for a total of 34%.
Since Oct 8, the market has risen 36% and is now in thestart of a second month of horizontal corrections.
Although we don't have anything to continue a rally, we really don't have anything to generate a fall, so I expect to see the market travel horizontally between 1215 and 1280 until something pushes it.
Mutual funds depositied around $13 Billion each week the first 3 weeks fo January, and withdrew $4 billion in the last week. Due to the huge difference between this number and previous years, I don't have a comparison.
The one thing that the market has for it is that continual influx of money-it has to go into stocks, bonds, money markets, commodities, or cash. But where? Right now its going to cash and bonds, and that will cause some sort of correction, because you have to have buyers at some price to sell your stock.
Liquidity and Value.
Anyone going to buy YHOO at its price tomorrow? Or CMGI, or even CPQ or DELL? Now pretend you area fund manager with your part of the $12 billion+ that just got dumped in your coffers this week...
lastshadow
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