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Technology Stocks : Semtech (Nasdaq:SMTC) -- Ignore unavailable to you. Want to Upgrade?

To: Leeza Rodriguez who wrote (1059)	2/28/2000 11:52:00 PM
From: Jeff Bond	Read Replies (1) \| Respond to of 1225

I know you like to quote Louis, I tend to agree with you on this matter also. Read something VERY interesting in the new Blue Chip Growth Newsletter (Vol. IV, No. 3, p. 2); something that puts a lot of the recent volatility into perspective. If anyone doubts my opinion machines (vs. humans) are running the show, you now must doubt Louis as well. QUOTE "In the old days (say, five years ago), market-makers dominated the NASDAQ, and they provided relatively orderly markets for most stocks, in exchange for fairly large spreads?such as 1/4, 3/8 and 1/2 point bid/ask spreads. Today, computerized trading systems, commonly known as Electronic Crossing Networks (ECNs) dominate NASDAQ. Nowadays, investors can trade NASDAQ stocks for just 1/32 or 1/16 bid/ask spreads. As a result, traditional NASDAQ market makers have essentially been squeezed out of business by the ECNs. The net result of these new trading rules is that the NASDAQ market is now hypersensitive to order flow. Here's a typical example. One morning in February, there were 38 large buy orders for a popular technology stock, but only twosell orders. What happens to that stock price? The law of supply and demand kicks in, and the stock will surge higher on order imbalances, as the ECNs raise the stock price sufficiently high to find more potential sellers. On the other hand, a few days later, this same stock has 44 sell orders and only three buy orders, so the price fell as the ECNs scrambled to find potential buyers. The bottom line is that the safest neighborhood in the stock market is wherever there is persistent order flow." END QOUTE Recommendation is for concentrating funds in mid-capitalization stocks, to the tune of 60% of total assets. Also mentioned that 90% of new money coming into market is "technology" bound. Sound familiar eh? Regards, JB