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

To: American Spirit who wrote (53228)	6/7/2000 12:43:00 AM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 99985

American Spirit, I think you've covered all the bases, Message 13840640 :-) TA Message #53228 from American Spirit at Jun 7, 2000 12:03 AM ET Maybe we got a little ahead of ourselves but I'd buy into any sell-off this week IMHO without much anxiety. I've been scanning new and threads and haven't seen any concrete reasons for any prolonged downdraft. Most of the bears sound irrational to me. On the contrary I see at least a modest summer rally in mid-course with at least 10% to go. With no reason for pessimism the attractive prices which already started appearing end of day today (days of gains erased in an hour) should attract significant buying by later tomorrow. Friday's numbers ought to make the bulls more daring unless Greenspan himself wants to squash it we'll go higher, at least most sectors will. Therefore a renewed rally could start Thursday after Wednesday stabilizes the action. I know inflation is a concern but higher oils prices haven't had the affect yet that they've had in past decades. Maybe that's because the "new economy" doesn't run on oil. Hell I hardly even need to leave my house to run two companies. If it weren't for errands and the occasional meeting I'd hardly leave at all. Looking at sectors, I see no reason for financials or retailers to go any lower, ditto major telcos, computers, drugs, foods, autos, chemicals, oils, internets, cyclicals, etc. Tech small caps already fell back to last week's levels late in the day. Suddenly they're bargains again. In other words we may have already had a very fast mini-correction which might be all we need. A profit-taking drop, that's all. And the same ones who sold will buy back in at slightly lower levels. Maybe creating a trading range but maybe breaking out of it Friday and next week. All in all not much time to go short. And since shorts tend to attack the best stocks which have just flown up it's particularly dangerous for them. Or bulls buying high-fliers after they've rallied hard. Same logic. Either way I'd scalp 10% gains and no more to be safe. I see any dip as healthy profit-taking to set higher lows and then higher highs as we rally off them into July. Possibly Naz 4000 by Friday. If we don't make it then we will soon. Maybe even 4300. I don't expect 5000 again until winter. Today was not the peak of the rally. It was just a pit-stop to take a breather and change the tires and oil. We may have a lot of yo-yo whipsaw action as bears and bulls collide and neither side wins for a few days. Obviously stockpicking is very important as not all picks will win or lose. Still a lot of oversold stocks out there, though some overbought ones too. But not as many as before 2pm today. Examples (SUNW down to 83 from 88, Intel down below 130, QCOM back to 67, CSCO at 62 etc.) Small caps got hit even harder. Some 25% drops at the end of the day wiping out a whole week's gains. Bottomline, though we can expect regular profit-taking and short attacks we're still in a summer rally unless something or someone (Greenspan) throws cold water on the market. From what I've been reading lately I wouldn't expect that to happen. But I admit it could. Anything anytime could happen as we all know. However, the only way I think shorts can make money is attacking at the peak of optimism. Just like going long at the peak of pessimism (like ten days ago). I see so many shorts attacking great stocks which haven't even made their move yet. That to me looks suicidal. That to me is a bullish sign. I don't hear anyone expecting us to take out highs of the year this summer. Bulls have modest expectations now. That to me is also bullish. Therefore back to my prediction of a general 10% rise in the coming weeks. After that I won't be holding through late July-August. But election season could get interesting. I'll be fully invested again by October. But until then there's pretty good money to made. Mainly on the long side, but on the short side too. Everyone has their strategy and takes their risks. I post this only because as usual I'm reading too much pessimism after the fact. It is even possiable that after a 15 minute sell-off in the morning we start rallying again and the shorts lose again. That can be the way it is betting against a rally in the middle of it.

To: American Spirit who wrote (53228)	6/7/2000 12:43:00 AM
From: Techplayer	Respond to of 99985

AS, I agree with most of your thoughts. I am personally going to shun the retailers and financials for now. I have seen very few positive comments (with the exception of Best Buy) in retailing. Circuit City was creamed today. I like the second tier techs that are earning money, have continued prospects for growth and are less interest rate sensitive. I have recently run up MRVC, VTSS, QLGC, HLIT and FFIV. I sold 90% of my positions Friday and yesterday in the event of profit taking. Most of them have held up, largely due to Supercomm and basic fundamentals. what has scared me a little is the talking heads starting to beat the drum on the SW sector and internet b2b's again. It has not even been decided how revenues can/will be recognized and the lofty valuations are being tossed around again. I will stay with infrastructure plays that have a future and a presence. Right now, I would not mind seeing a day and a half of selling to get some of these stocks back at last weeks' prices. If we get further evidence of a less explosive economy, wall street will roll right over another 1/4 point if the fed decides to go that way and imo, hit the range that you mention. I don't see 5k unless earnings continue to exceed expectations in the face of the interest rate hikes. Btw, Bloomberg tonight showed that Gas estimates for July have been raised to an average of 1.55/gallon. Good luck, Tp