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To: Sultan who wrote (40623)	2/11/2000 11:44:00 AM
From: Michael Watkins	Respond to of 44573

Sultan - its just my diabolical mind working. The basics are this: The NYSE and SPX stocks for the most part are already in corrective phases and/or many have lately tested tops and failed - we don't know for sure if many of these will correct, but if we assume they will pull back at least, we have some momentum to the downside. The Nasdaq simply can not hang out up here indefinitely, it would almost be unprecedented for a market to gap up like that without some confirming move very quickly. At this time I can find little reason to support a sustained move up by the Nas, and suspect that eco news or something else will provide a catalyst for a pull back. Now the most diabolical action that could happen is a gap down of the Nasdaq. For that to happen, there needs to be a catalyst, or complete lack of buying if not active selling. Could this happen over the weekend? Never know. What we do know are that the downside risk far outweighs the upside potential. A downside gap of the NDX and COMPX will be widely seen by professionals as a very bearish sign, and that should contribute to further selling as larger players take more off the table. Basically we are in an enviable spot here, the market must prove itself one way or another. And by the market, I mean the Nasdaq only... the other markets are already in bear phases... what we don't right now is how far they will go. Now we don't have to be bearish to understand that the upside reward potential is dwarfed by the downside risk... at least for the next few days, and that's why I personally am not long anything right now.

To: Sultan who wrote (40623)	2/11/2000 2:05:00 PM
From: Michael Watkins	Read Replies (1) \| Respond to of 44573

According to my work, the SOX has put in the ground work for a breakdown today. The all time highs are key; the other level to watch is 929. If things play out it will dance betwen 918 and 929, only if market conditions support a big run will it try to test all time high; a serious break below 918 is probably the signal of the swing high on the Nasdaq. And CSCO has shown no signs of defending its high. 132 is now key resistance... any run to old highs will probably be bound by 132 and 136... should it manage to get back up there, I would take a second break of 132 as near concrete evidence of that stock, and perhaps networking sector/tech sector, breakdown. All because of "profit taking" no doubt. ;)