MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 683.31

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Nov 12 4:00 PM EST

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To: donald sew who wrote (8558)	3/20/1999 8:51:00 PM
From: Mad2	Read Replies (2) of 99985

Don, I would suggest focusing on computers, and sectors that will slow ahead of Y2K. General consensus is the computer software followed by the computer hardware stocks will suffer recessionary demand in the business sector during the later half of the year as companies are expected to divert their IT budgets towards testing and programing with little time for buying/managing new hardware. Puts on IBM/DELL and anyone who serves the corporate IT market with big ticket items (except maybe EMC???) should pay handsomely. Manufacturers can be expected to finnish the year strong as a hedge against logistic troubles. Most everyone I talk to instead of working inventories down at year end, will be looking to finnish the year with adequate stocks as insurance. Slowdown in techs and unemployment amongst software programers during the 3rd and 4th qtr, followed by a correction during the 1st qtr of January should be enough to spook the consumer into thinking we might be heading for the great depression. Formula for a contraction in consumption and recession starting in the 4th qtr of this year, leading to lower interest rates and a recovery in the 2nd qtr of 00. BTW I'm not sure I'd bet against paper and cyclicals as a strengthening in Asia or the perception of a slowing US economy (weakening dollar) should help those sectors, techs should be a easier target I guess is the point

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