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To: Bill Harmond who wrote (73088)	8/11/1999 1:57:00 AM
From: Tradegod	Read Replies (2) \| Respond to of 164684

William, do you think today's rally will have stronger legs than last Thursday's?

To: Bill Harmond who wrote (73088)	8/11/1999 3:07:00 AM
From: GST	Respond to of 164684

William -- I don't expect the same relationships to hold. If you will recall, INTC was trading at 11 times trailing earnings in those days. And there was little in the way of a yen carry trade. Not to mention that in the past five years we have racked up a trillion dollars in trade deficits -- for which the bill is now coming due. The 2 trillion or so in liquidity pumped into the system in the last two years has taken us to breath-taking highs -- and we are still basically at those unsustainable highs. We will continue to see foreign selling, with an investment inbound net deficit of several hundred billion dollars this year compared to last. There is also big potential for forced margin selling (with something like $200 billion in stock bought on margin yet to be unwound), as well as rising rates and a compression of multiples instead of the expansion we are used to for growth stocks. When rates come down it will signal a softening economy and perhaps a recession -- but that is many months away at the earliest. In the meantime, net stocks are flooding the market and they will take it hardest as demand is already drying up -- the dye is cast -- I am sorry to say I think it is over except for these little rallies which are great to play if yu can catch them and sell into them. Its a sell the rallies market. Good luck.