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: GROUND ZERO™ who wrote (31645)	10/28/1999 8:28:00 AM
From: John Madarasz	Respond to of 99985

Biderman: record liquidity - stays bullish by Gary Funck 28 October 1999 01:21 UTC -------------------------------------------------------------------------------- trimtabs.com (October 25, 1999) Charles Biderman stays bullish: "Stock market liquidity surged to $5.7 billion last week. A $7.7 billion flow into US equity funds ($12 billion all equity), the third straight $4+ billion week of cash takeovers and $6 billion of new stock buybacks swamped $5.4 billion of new offerings. No surprise the TrimTabs Market Cap Index of all US traded stocks (which does not include ADRs) popped $590 billion, or 4.0%, over the last five days. Yet while liquidity has been a positive $17.5 billion so far during this October; the Market Cap is up only 2.2%. What's more, while there have been two weeks where stocks popped 4%, they also dropped by 6% the week between the two gains. What's going on? The answer: you can lead a portfolio manager to water, but you can't make them invest. Even as cash pours in, if PMs are bearish, the market will go down -- but only for a while. One sign of how bearish PMs have been is that, according to Jim Bianco, on October 19 the net short position in the S&P 500 futures by large traders was the largest over the past five years. Bottom Line: with all the new and sideline cash available, we would not be surprised to see this market really take off this week." He cites stong corporate cash buyback and acquisition activities, and notes that inflows to mutual funds have hit record levels. He says that some of this may be due frustrated online investors who tried their hand at investing/trading on their on, and after not having much success are switching back into mutual funds. He also thinks that several years of economic prosperity have increased the individual's level of disposable income. He reaches some of his conclusions by a careful read of Schwab's financial reports. csf.colorado.edu Best Regards, John Madarasz

To: GROUND ZERO™ who wrote (31645)	10/28/1999 10:06:00 AM
From: HairBall	Read Replies (3) \| Respond to of 99985

GZ: The actual overall market peaked April 98 per the VGY and A/D line. The overall market as measured by the Indexes peaked per my OMC in July of this year. We continue to see a staggered move down. (I have mentioned this expectation in earlier post on this thread.) The first stagger relationship I see is between bond rates and the equity indexes. The second stagger relationship I see is between the two primary "weighted" indexes, the NYA and the COMPX. Looking at formations of the two on the daily semi-log charts, the NYA is in a falling wedge while the COMPX is in a rising wedge. This will provide divergence on the way down for the indexes. The NYA will begin to lead in the up moves as it retraces some of its move down. The NYA has led in the move down to date. The COMPX will begin to lead in the down moves. This will help keep the bullish case alive as the equity indexes and eventually rates make staggered moves to lower levels. I suspect, if we see a strong momentum move down in the equity indexes, it will come at lower levels. Then I would expect the years of BTD mentality to kick in, creating a strong corrective rally in the equity indexes. Before this market can begin a sustained rally again, I believe the "glamour" issues will have to be rung out. I expect my OMC Index to move well back into its multi-decade rising trading channel. This has not happened yet, but it will. EDIT: I typed this before the market opened this am, but am just now able to post it. The NYA has breached the upper descending trend line of its falling wedge. The stagger continues...I will try to post some charts which support the above expectations later today! I must admit, I am a bit surprised the OEX/SPX is leading the rise on a percentage basis. Good trading... Regards, LG Disclaimer: The above is my opinion only and I reserve the right to be wrong. An overall market expectation is just that and should not be used in exclusion of the evaluation of individual equities or other investment instruments. Do not base any investment decision solely on anyone person's views or analysis. Do your own research and take responsibility for your investment decisions.