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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: James F. Hopkins who wrote (14042)	5/15/1999 1:51:00 PM
From: Ramsey Su	Read Replies (1) of 99985

James, very interesting post. If my calculations are correct, the Hopkins NDX 9 features the following: 1. 15,541 million shares outstanding. 2. Total market cap, based on Friday's closed of $1,143 billion. 3. A $1 drop per issue = $15.541 billion "vanished". 4. A 10% drop = $114.34 billion "vanished". 5. A 20% drop = $228.68 billion "vanished". What is not known is what % of these shares are held by long term investors. Even though we know the trading volume and assuming your 148% turnover is correct, we don't know whether it is a few % of traders creating all the volume but definitely not every share turning over 148%. My point being that even though actual money is realized by the traders, the paper wealth affects millions of households who would feel $229 billion "poorer" if just these 9 stocks take a 20% correction. I believe that $200 billion is the average amount of mutual fund inflow the last couple of years. Our economy has at least been partially driven by the positive wealth effect for the last few years. As someone earlier referenced Paul Volker, our stock market supports our economy and may be supporting global economy right now. The reverse may be the BK. Next Monday is going to start off with HWP earnings. Lewis Platt has made some very positive remarks when CPQ was laying off their CEO so I assume HWP will not disappoint. Tuesday is Dell and AMAT. The biggie, of course, is the FOMC meeting. In the event that all of the above are negative, it would be a fun ride on the BK. We have only Monday to place the bets. What should it be? Ramsey

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