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: pater tenebrarum who wrote (19173)	7/2/1999 11:21:00 AM
From: Les H	Read Replies (1) \| Respond to of 99985

Don Hays' commentary So far, the scenario is exactly on track. The NASDAQ had more stocks making new highs yesterday than anytime in the last year, and that is a good sign. The broad-based Value-Line Arithmetic average has been consistently making new all-time record highs, and that also is a good sign. As we suggested a week ago, the market is poised for a "spirited" rally, possibly pushing the Dow to a high close to 11,600 by the third week of July. We believe this will be the last rally before a more significant sobering up will come. That sobering up should be predicated either on concerns about the Fed's August FOMC meeting with commodities moving up, concerns about Y2K approaching, or growing concerns about 3rd quarter earnings. BUT, with the broadening out of the market, we will be watching the action closely for clues that something very unorthodox is occurring. We will be watching closely the action of the dollar, and the international markets. You see, even with the new upside action we are seeing a very definite change in the bull market's personality. The Value-Line Arithmetic average has taken the role as the market leader, instead of the distinct laggard role it has held for the last three years. With the S&P 500 still at its highest valuation in history, by far, we believe a decade of underperformance is facing those large-cap stocks. They have enjoyed a decade of downsizing, merging, acquiring, buying back their stock, and cutting back on expenses, and we suspect they have about run out of fat to cut. The technology phenomenon has worked its magic on earnings progress for large cap stocks. But even though small cap stocks (which also typifies the average US stock) have been ignored, a plot of their earnings progress shows that their earnings have more than kept up with their large-cap big brothers. So if earnings have kept up, while the prices have not, the price-earnings ratio for the small-cap issues is still very modestly valued. Even at that, it is extremely rare that small-cap stocks act good if large-cap stocks are weak, so our concerns about the large-cap portion of the market is putting a damper on our overall opinion. But we are watching the action after this rally runs its course, which we suspect will be subsequent to the July 17-20, 1999 juncture. The same applies to the international arena. When the US catches a cold, usually the rest of the world catches the flu. So overall, to repeat our statement of last Wednesday's market comment, "It's okay to go out to play, but don't stray too far from cover, and keep your umbrella's handy."

To: pater tenebrarum who wrote (19173)	7/2/1999 11:50:00 AM
From: James F. Hopkins	Read Replies (2) \| Respond to of 99985

HB; Don't forget me, I was bearish but never saw the correction I expected, and now think the market has got some legs. I know my timing has gotten off and I don't trust it at this time. Today I figured at least some volatility would set in , and it's been steady as she goes. I saw several bears on CNBC who like you said, "have capitulated" is this a real warning ? Well we can't fight the tape and markets do go to extremes , they also climb a wall or worry, and seldom drop big until most of bears turn to bulls. ------------------ That some time this year we will have a serious pull back I'm reasonable sure , maybe more than last year but when it will come I don't know, or how high it will go first is now a very big question in my mind, but with my timing being off I don't even want to venture a guess. For the time being she has legs I'm looking to play the long side, ( but as careful as I know how ). Jim PS Looking at last year the TYX actully dropped in May-June and set up the Early July rum, then it did a minor rally and that started the Late July sell off, right now it's as high or higher than it was prior to the sell off, and seems stuck at about 6% , and the market loves it.

To: pater tenebrarum who wrote (19173)	7/2/1999 1:14:00 PM
From: bobby beara	Read Replies (1) \| Respond to of 99985

Heinz, i almost fell out of my chair, when i heard russell comment. 10 dma p/c .47 9 day spx rsi 72 and will be higher today on a positive close. we are within just a few sessions of a top. we are very overbought, with a little tiny complex bottom, no basing at all here to fuel a rally, no sentiment washout to fuel a rally. quote.yahoo.com we will probably have another small change in the mcllellan oscilator, which happened at the top of the last rally (two minor change at the top of the rally), which was a sign of exhaustion, not a sign of pause for further gains. and then you have quepasa.com and askjeeves.com and people think i'm silly wearing my propeller beanie -g- bb