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

To: JOHN W. who wrote (76718)	5/9/2001 4:58:11 PM
From: t2	Respond to of 99985

Having doubts if we can break 2200 ceiling on anticipation of FED alone. Agree. The reason is the timing. Many traders don't like to be buying so early (well ahead of earnings). However, if mutual funds take advantage of the opportunity and if there is enough of them, we could still see a lift. I have a link to the inflows in stock funds and there seems to be a continuous flow for weeks now. Don't believe that money has been really spent yet. thestreet.com The inflows will probably put a downside floor to the market near term. To push it upward, we need more announcements like the one from EMC and aggressive buybacks from companies that already have such plans in place. Of course, their positive outlook also helps and may be more important. This also helps. ITWO just said prior guidance was conservative. I believe that news was out after the bell. Global Crossing also seems positive after the bell. Incrementally positive news is necessary...ie improving fundamentals to make any significant gains. The weekly jobless claims and consumer confidence numbers tomorrow will be key. Both numbers better than expected and we could get a significant rally...leading into the FED meeting. If both are poor, I would not bet on much positive movement in the stock market tomorrow. The fact that the Dow/Nasdaq could not hold the rebound today is not good. Therefore, some good news is required for the market to move up tomorrow. With a weak economic number, we may be heading down to about 2100. Still expect a rally late Friday as short covering ahead of FED week takes place. Of course those kinds of gains are usually short lived unless the real buyers are still accumulating. 2000 could be in sight next week. BTW--I am still betting on the move up but taking note of the risks...so that some hedges can be put in place, if necessary. Just in the process of making up my mind for how to play the market near term. Tomorrow will probably be key to my thinking.