Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: bobby beara who wrote (18067)	6/21/1999 5:04:00 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 99985

Bobby, i agree that the sectors which have had breakouts on the charts will continue to lead on the upside. however, i don't think the rally in the cyclicals will be aborted because of this. the p/c ratio on the members of the CYC is too favorable for this. more likely, we will see a typical blow-off market, with broad participation. while rotation is probably going to continue, i expect it to do so in a bullish manner, where one sector corrects while the next is advancing. net/net the outcome will be a broad advance. we must not lose sight of the negatives in all this: one is that the ratio of bullish to bearish advisors is at levels last seen in 1987. if a blow-off is indeed in the making, i would not be surprised to see this ratio go to never before seen levels shortly before the market makes an important long term top. there is a remote possibility that the first tightening by the Fed will start a larger correction or maybe even a bear market, but i don't believe so at this time. i envision some selling immediately following the Fed's decision on rates, followed by a renewed surge of buying that will take the market to new highs. as has been observed by several people, a 1/4 point hike will achieve nothing in terms of keeping the mania from roaring on. an insightful column on this subject has been written by a. abelson in this week's barron's. he says quite rightly, that one has to wonder about AG's statements which on the one hand deny that a bubble in financial assets can be discerned with any certainty and on the other hand ascribe enough prescience to the Fed to spot early warnings on incipient inflation. frankly, i would have thought it's the other way 'round. still, the typical behavior of a late-stage long term bull market is to ignore at least the first hike in rates and advance in parabolic fashion in a surge of panic buying. it will be interesting,to say the least, whether we will be able to identify the top when it comes. if so, a most profitable shorting opportunity will be at hand. until then, don't fight the tape. the final stage of a bull market is always the most painful for the bears, who will likely throw in the towel at exactly the wrong moment...<g> regards, hb

To: bobby beara who wrote (18067)	6/21/1999 5:14:00 PM
From: donald sew	Read Replies (2) \| Respond to of 99985

Bobby, The strongest of the HiTECH indices are: XCI - computers(as you mentioned) CWX - computer software The weakest of the HiTECH indices is the DOT.X It appears that the NAZ and SPX will set new highs, with the DOW lagging. Whether the DOW sets new highs or not, it should be close. It appears for now that the cyclicals/basic materials/drgs may be the laggards in the DOW. Im going long on the dips for short-term trades. This correction is not yet over, but certain sectors will be setting new highs. Some of these sector upswings are going to be quite powerful. Something like last year when the topping process started in APRIL but the DOW/SPX/NAZ not topping out until JULY. I would change my longer term bearish stance if the market internals improve dramatically and is sustained. Untill that happens this upswing in some indices to new highs, and possibly very strong upswings, is just part of the correction process. seeya