MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 659.00

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Nov 21 4:00 PM EST

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To: GROUND ZERO™ who wrote (9778)	4/4/1999 2:36:00 PM
From: Lee Lichterman III	Read Replies (2) of 99985

I have often wondered about that myself and I believe I asked this question a while back. I see there are 3 scenarios possible. 1.) The majority of stocks that are down, finally begin to recover using sidelined money pushing the indexes up further and as breadth improves, we relax and start a new bull run. 2.) The down trodden stocks move up but use money from the inflated street favorites improving breadth but the indexes don't move much since the high flyers are the ones that tend to prop up the indexes so as the small guys move up it is ofset by the big boys moving down. 3.)Lack of breadth finally breaks the market down when enough of the big boys disappoint and it becomes apparent that paying high PE ratios for decreasing earnings can't go on and we finally capitulate and the indexes show what has been going on for a while now. I feel the small caps and smaller midcaps with low float will probably never recover anymore just due to the funds having to be able to get in and out quickly thus their reluctance to move in these. Only if the market solves the problems we talk about everyday and when clear blue skies show up again will there be any chance of funds moving into the lower float stocks. Some one asked me the other day about Y2K and the market. We always think about 1 Jan as Y2K but he brought up the point of Fiscal year. Since October is always a bad time for the market, what a nice cover story for the final breakdown if the Y2K were to hit at the Fiscal 1 October 2000 mark. Hmmmm Good Luck, Lee

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