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

To: Zeev Hed who wrote (40106)	2/13/2000 9:54:00 AM
From: HairBall	Read Replies (1) \| Respond to of 99985

Zeev Hed: Around the first part of 1999, I called for a medium-term top in April of that year. I was expecting some rotation into previously out of favor issues, both small, medium cap and blue chips. I did not expect when the NAZ corrected there would be such a strong rotation into blue chips. Thus we got the strong move in the Dow while the NAZ corrected. Favors recently in his Friday freebie and lately several brokerage analyst on TV have voiced expectations of a similar occurrence when the NAZ corrects by April or so. Personally this time around, I think magnitude and velocity of the NAZ pullback will determine rotation or bail. And as you mentioned, the Dow now contains some NAZ big caps. So, depending on the magnitude and velocity the Dow Industrials may or may not get that rotation rally this time around! Frankly I thought the top was in last year. I was wrong. The only other time I have called a major top was a little prior to the 87 top. I got me and family small just before the top was set. No easy task as my mother was working for Fidelity at the time and she was under pressure to remain bullish. Of course after Black Monday, she was all smiles! Calling this top will not be easy. However, every time I read a medium-term top I now play it as if it could turn out to be "the" top. The move up and out of the 25 year trading channel by my OMC Index in Dec 98, put me in that cautious mode. I think the risk to rewards has now shifted enough to warrant such caution with the retirement funds and long-term retail accounts at each medium-term top. If it turns out to be just that, a medium-term pullback, then as long as you reenter your positions at or below your exit point you have not lost and even maybe gained on a buy and hold strategy. Of course, this does not take into account tax obligations. I use to figure my tax obligation in my investment formula, I stopped that over a decade ago. However, I do look at it with regards to what the big boys may be doing. During times of caution, I still stay in the market with my day/swing accounts. (Speculative (gambling) monies only.) No one should gamble (day/swing trade) with their entire "grubstake". I really do not care if the market goes up or down, I just want to be on the right side of the moves. It is always nice to see you drop by...thanks for the bullish post...excuse the ramble! Regards, LG