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

To: Boplicity who wrote (76433)	5/3/2001 9:37:12 AM
From: t2	Read Replies (2) \| Respond to of 99985

You need to think in front of the masses That is basically it. Today is going to be a very interesting day. Did you hear all the talk about how short covering was the reason for a big part of the recent gains on the Nasdaq. I don't buy it. My feeling is that shorts did cover but came back in to short already. If they are bearish on the prospects for a lot of the tech companies, why not short the stocks after some significant on the on the Nasdaq----basically an opportunity to short a bear market rally. Remember all the talk about being wanting to short more at the retail level and looking for short funds. What happens when these individuals look at what happened to performance in those funds for April.....the same people probably got into such names at the lows in the Nasdaq as well. Redemptions in those funds! That creates forced short covering. You will also see a reluctance to sell the tech focussed fund companies like Janus...all people need to see is a small gain and they will be convinced that it is coming back. It is just way the masses think. My bet is that the market rallies as the realization sets in that there is more at work than just short covering (even if it takes a breather for a day or two). Still not ruling out a big gain today. Need to see a bit more trading to determine that. That will create the beginning of the real short covering, IMHO. Will make a lot of hedge funds go long as well as the strength of the market is recognized. Of course, these guys are not in it to lose money, they want to make money, whatever the direction.