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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: Jenna who wrote (27671)3/16/1999 12:08:00 AM
From: Mike S.  Read Replies (2) of 120523
 
Kensey just changed his portfolio and recommended recommended _INDU (Short)

'kensey' said:

I don't think the dow has enough breadth to take it far over 10000 at this
time. The average is close enough to that historical market to probably
hit it, but I don't think it is going to ignite significant buying or much
in the way of euphoria.

The DOW is being driven up on the strength of financials, oils and
cyclicals and basic materials. The oils have about run the course of a
quick run-up so I don't see more in the ways of gains there. The financials
are probably in a position to move higher. But is the sum total of
these sectors strong enough to take a leadership position in the
market now that technology is essentially in range bound trade?

The rally of the past 2 weeks has been driven more by speculative momentum
that fundamentals. In fact, the fundamentals are deteriorating in the form
of higher rates. Are rates in a position to come down right here? The
jury is out but it hasn't happened yet.

Narrow breadth is the deal here. Expect selling as the dow hits 10000
if it in fact does. Enthusiasm will wane upon potential of that marker.

The market is still in a relatively narrow trading range. Expecting range
bound action to continue. Technology stocks MUST move higher as the
market is not going to be able to make much forward progress without
their participation. Unfortunately, technology is NOT in a position to
see an expansion in valuations. Valuations are high and there have been
enough earnings disappointments to prevent higher valuations. Technology
is priced pretty high. Is there is a case for higher valuations. DELL
had an revenue shortfall recently. Yet still trades at a PE of about 80.
Is that PE going to expand? No.

Trading opportunity has been confined of late to the shooting gallery
taking place in the Internet sector. Funny how the pundits predicted
that the bubble popping in the Internet sector was going to take down
the entire market. What has in fact happened is that Internet sector
alone is largely responsible for holding up the broad market. The
fact that Internet is the leadership group is another facet in the
case for continued range-bound and volatile broad market action.
Simply due to the fact that the Internet sector is very volatile.

Any comments on this recommendation should be make on the boards.
Actually, this isn't a recommendation at all. This is more dinner
conversation. All recommendations issued by myself should be
regarded as dinner conversation. In fact, recommend should be
renamed dinner conversation as a section. These are nothing more,
nothing less. Anyone that trades solely on the basis of any
recommendation made by anyone on the site is taking this out of
context.

Right now I am trading in the direction of the prevailing trend.
Which is up. I am not turning maintaining a bearish stance on
the market. But I am putting on a hedge by shorting big cap
technology names on strength. Given the fact that I think range
bound broad market action is the most likely result, I'm
balancing on both the long side and the short side.

Agree? Disagree? Follow the url at the bottom of this page. The boards
for the Nasdaq Comp and the S&P 500 and the Nasdaq Composite have been
very active of late concerning market direction, which sectors to
be in. In fact, posts on the Nasdaq Comp board were littered with
calls to move into the energy sector before it happened.

kensey
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