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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts -- Ignore unavailable to you. Want to Upgrade?

To: Junkyardawg who wrote (40346)	6/20/2000 11:58:00 AM
From: The Phoenix	Respond to of 63513

Don't know... but I bought some ITM (July 100) QQQ puts at $6. ..edit now trading 6 3/8 x 6 5/8. looks like I'll catch a dip here. OG

To: Junkyardawg who wrote (40346)	6/20/2000 12:25:00 PM
From: Original Mad Dog	Read Replies (2) \| Respond to of 63513

Am I nuts or does this make sense? Yes, and yes. <g> The Dow is less representative of "Old Economy" than the Nasdaq is of "New Economy", for two reasons: (1) they have added some stocks to the Dow which are New Economy; and (2) the remaining Old Economy stocks in the Dow really only total 20 or 25 companies, and some of those are not entirely Old Economy. Here's a link to the list and delayed quotes for each: finance.yahoo.com@^dji&d=t Before using the Dow as an indicator of general trends, I would separate the 30 companies into three groups. Group 1 -- New Economy stocks (MSFT, Hewlett-Packard, IBM, Intel) Group 2 -- Hybrid stocks (companies which do not clearly fit Old Economy or New Economy labels) (Home Depot, SBC Communications, ATT, and Wal-Mart) Group 3 -- Old Economy stocks (separated into subgroups)Financials (3) -- AmEx, JPMorgan, Citigroup Consumer Products (6) -- Johnson & Johnson, P&G, Coke, McDonald's, Eastman Kodak, Disney Manufacturing/Technology (6) -- GM, Boeing, Caterpillar, Honeywell, United Technology, 3M Oil/Chemicals/Commodities (4) -- Exxon Mobil, Alcoa, DuPont, Intl. Paper Pharmaceuticals (1) -- Merck Soon-to-be-Extinct Producers of Cancer-Causing Addictive Products (1) -- Philip Morris Companies which do everything (1) -- GE Dawg, when trying to identify a sector rotation, I look for days in which the Group 1 and 2 stocks above (and especially Group 1) are up while the vast majority of Group 3 stocks are down. I treat any move of less than 1/8 as unchanged because usually either the bid or the ask will be at an unchanged level. Within Group 3, I look at whether the decline is concentrated in one of the subgroups above or is spread across them all. As of just before noon, 3 out of the 4 Group 1 stocks were up. Group 2 had 1 up, 1 unchanged and 2 down. And Group 3 had 2 up (GE and Caterpillar), 3 unchanged, and 17 down (spread across all subgroups). So today, the Dow and Nasdaq indexes are actually understating the degree to which sector rotation is going on. Not sure it means anything in the back and forth, tug-of-war market, but it's an interesting way to analyze things on a slow day. MAD DOG