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Strategies & Market Trends : Point and Figure Charting

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To: Judy who wrote (20349)	5/25/1999 4:44:00 PM
From: James Strauss	Read Replies (1) of 34809

Judy: What probably is making this internet correction worse is that last bit of margin buying on the last dip... In the past this was a profitable strategy as the nets always bounced back... This time the nets kept going down... This left many people margined up the kazoo watching their losses magnified 2 to 3 times as a result of their leverage ratios... So, as you said, this exacerbates the downside movement in the nets... It also psychologically affects the rest of the market and also affects normal daytrading because margin buying power is drying up... As margin buying power dries up so does the rate of daytrading... As daytrading dries up, so does the rate of market momentum that has been levitating stock prices... It's just like a row of dominoes... Jim

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