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Pastimes : NNBM - SI Branch -- Ignore unavailable to you. Want to Upgrade?

To: Clappy who wrote (3090)	4/17/2001 12:42:24 PM
From: Clappy	Read Replies (7) \| Respond to of 104155

My thoughts on the current market psychology of the houses: The Naz had been approaching an short term overbought condition. The houses (via MSDW and Barrons) came out with lowered expectations of the chip sector. On a day of very low volume, the chips fell a little. This tells me it was Joe Six Pack selling his shares of BRCM, XLNX, TXN, etc. Not the institutions. The houses may have been looking for a way to get heavier into tech, and used the warning as a method to do so without driving the price higher. Yesterday, the mutual funds were busy selling bonds. The school of thought being that many funds maintain a fixed ratio of stocks to bonds. Recent stock selling would mean a need for bond selling. Now they have cash to go shopping for a little while. The institutions are looking at the chart of the Naz as a possible bottom. Bring it down for a retest and then allow it to rise as they get fully invested... Then the unexpectable happens... CSCO warns with a devastating warning. Where is the rainbow in that warning that was sufficient enough for the Naz to be bought today? Answer: There is none. Was it already figured into the market? No chance. Not a report as bad as that. Were this mornings economic numbers (CPI etc) good enough to expect the Fed to lower rates? I don't think so. With inflation looming? Besides, many already thought of the lowered rates to be counted in. So why are we still afloat? Why has the Naz not gotten the crap kicked out of it? Seems to me that the houses were not ready to let it happen. They got Joe Six Pack (a.k.a. myself) beginning to believe that this is a clear sign of the bottom. Is it? How can it be? This is not just a lowered expectations warning. This is Cisco saying that they never even designed a strategy or model that indicated such a sharp drop in orders. They don't know how to deal with it. Caught with their pants down... And they can't tell when things are going to improve. This can't just be CSCO specific. I'm not sure this is anywhere near the bottom for the markets . Or is this again all a part of the game the houses are playing just to screw with my head? They are doing a pretty good job. I wonder if we float around this level until after Friday's option expiration. Then the flood gates open... I'm not making any moves until the market tells me. I just wish I could get a bead on what it is they are trying to do here. -Joseph S. Pack