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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 694.07

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Jan 29 4:00 PM EST

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To: Casaubon who wrote (7184)	2/28/1999 1:11:00 AM
From: Lee Lichterman III	Read Replies (1) of 99985

I guess it depends on what you watch and we all watch different things which is what makes this board one of the best IMO. I track both the indexes and individual stocks and although I am just finally getting aroundf to my weekend routine of scanning my folders I already see some interesting things. Stocks that I like for long plays that are values based on price etc (unlike the street favorites that are ridiculously priced IMO and are finally starting to fall) all had EXTREMELY Low volume as there were few "smart" investors ready to step in and buy with the heavy selling in other areas and danger signs all around yet there was an increase in volume in the issues that were getting hammered. Now over all there wasn't an increase in volume in the market but when I see one my long play stocks that normally trades 7 mil and it trades 2 that day, it helps mask the 4 times normal volume of the ones that are dropping. I also don't think that calling CPQ, DELL, INTC MU AMAT KLAC KLIC etc a few high flying stocks as these are the generals of the NASDAQ. I haven't any real opinion yet as to market direction. BB stocks actually were advancing in volume while other indexes were getting hurt. My system is nearing buy recomendations on a few things but I still have a few more rounds of shorts ready to fire off in a second volley. As always there are conflicting signals but they are getting less crossed with the passing of time and this unrealistic valuation in the darlings had to come to an end and I for one am glad that this is happening as it is helping to relieve some of the pressure that was going to implode this whole ordeal. Now if we can just keep the dipsters out of the way, we may be able to save this bubble by slowly letting some more air out. When I see fundamentally sound companies growing over 30% selling for PEs of 5 or 6 and PC related issues that are slowing in growth selling for PE ratios of 100 things have gone nuts. I don't want to see panic selling (I don't have enough puts yet <ggg>) but I would like to see them slowly grind down then stay flat until earnings catch up to their valuation multiples. This has been a fundamentally annoying market the last couple years as the Mo Mo crowd won out on the value players. It was jump on the band wagon or be left behind and damn the torpedoes full speed ahead. TA let us play by timing yet it was hard to sleep at night knowing you were in a high flyer with no FA. I for one missed out on many good runs even though I saw them coming. I could have made a killing on MU during it's rally but I sleep better playing the down side of that farce than had I played the long side. I missed the first down pour but it gracessly allowed a second chance. FA always wins in the end but TA rules the short term. These darlings of the street will all fall in time (or else trade flat enough to wear the devaluation of the dollar and lost income from other plays while money is tied up in them) it just takes time for the glue to wear off sometimes and at other times the permanent brain damamge is already done and we just have to wait for the smart money to take advantage of the vegatables. Nice to see you aboard the thread, Lee

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