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To: Joshua Corbin who wrote (34403)	10/31/2000 9:59:42 AM
From: donald sew	Read Replies (2) \| Respond to of 42787

clstamper, >>>> So there is a 50% chance that both the DOW and NAZ will be heading in the same direction. There's also a 50% chance that they will be in different directions. One man's sector rotation is another man's random walk down Wall Street! <<<< Mathematically, you are absolutely correct, but how many of the J6P think that way. I do, and it appears that you have that ability, but to expect J6P who do not watch the market all day and hold a 9-5 job, do not approach the market with such an analytical view. I still know plenty who dont even have a clue what a trendline is, nor do they care to learn when I attempt to explain. Most of the time I hear from J6P is regurgitation of what a certain analyst recommended. Sector rotation to them just means that their analyst is saying to invest in another area. So as you say, it is a random walk for some, I agree, but would add that its a very few. For J6P it aint no study of mathematics, but more like "my broker/analyst said to move my money from here to there. Wheres the randoness in that?

To: Joshua Corbin who wrote (34403)	10/31/2000 11:48:21 PM
From: Dan Duchardt	Respond to of 42787

clstamper, So there is a 50% chance that both the DOW and NAZ will be heading in the same direction. There's also a 50% chance that they will be in different directions. It's really not as simple as binary switches, but even if it were there is still the possibility of a positive or negative correlation between the Dow and the Nasdaq. If there is no correlation, your statement would prove true over time. But if in fact the data shows that a rising Dow is more often accompanied by a falling Nasdaq, and vice versa, then the evidence shows a negative correlation between the two and suggests that money is merely being shifted from one place to another rather than added to or taken from the market. I have a hard time locating a source for the data, but somewhere there ought to be a total US market capitalization number that could be used as a measure of money flowing into and out of the market, and similar numbers for all the different indices. These numbers could be used to see if such correlations really do exist. Dan