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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 662.72

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Nov 19 4:00 PM EST

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To: pater tenebrarum who wrote (11585)	4/20/1999 5:43:00 PM
From: StockOperator	Read Replies (2) of 99985

Heinz, There seems to be quite a bit consensus that the tech rebound is not to be trusted. Ralph Bloch for instance said yesterday that the chance of a "v-shaped rebound in netstocks occurring was between zero and nil.on all the stock-specific threads, cries of "it's over" can be heard. on cnbc all sorts of interviewees proclaim uncertainty. so maybe, just maybe, we should trust the recovery for now (and implicityly the message sent by the OEX p/c ratio). I retyped your post because I think you made some interesting points. I must admit that I don't really follow too many stock threads. But it is not surprising to hear investor's sentiment become bearish. This recent downdraft has been swift and painful. And because of that it only makes sense that many will feel that this bull run is over. Of course that logic is a great contrary indicator to where prices may ultimately be headed. The main problem that I see with viewing the markets in this way is one has to honestly ask themselves if their analysis is causing them to lead or be led by the market volatility. Of course the market has taken a hit recently. But after an almost 1000 pt advance in two weeks some sort of retracement is only warranted. Look at some of the companies that have been hit the hardest - RNWK last week hit a high of 263, yesterday it hit a low of 127 but believe it or not last month the low was 70. Plus yesterday it dropped 41 while today it rose 52, hitting a completely higher high. So I really do believe one has to view things in the context of the bigger picture. That why Ralph may be wrong here. If any sector in the market is capable of pulling off a v-bottom it is the net group. Stocks like AMZN and YHOO have held up pretty well here. In fact many of the gaps across the board have been filled which is great technically. The atmosphere you describe above is perfect for a continuation of this bull run. Of course I will be watching for the stabilization of prices at this level. Good trading. SO

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