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

To: Doug who wrote (77307)	5/22/2001 1:11:18 PM
From: t2	Read Replies (2) \| Respond to of 99985

Doug, Huge volume on the Nasdaq today. I believe they hit 1 billion by 11:30 am. That is why the potential exists for another explosive day on the Naz. As I stated earlier, my reason for liking the Nasdaq stocks over others is the high degree of short interest combined with large fund families like Janus, Fidelity having already lightened up on tech in the first quarter or earlier. There are lots of other factor too..such as little in IPOs. That also makes this period different from 1999 times..when there would be massive inflows as well as new offerings. There are also other factors like the end of the selling for tax purposes by April. I have also already stated my belief that mutual funds over do the selling in anticipating redemptions (end of March; early April), which are usually less than expected...meaning that excess cash has to be then put to work again. Margin debt as a percentage of market cap has also declined..another positive. Sorry to be repeating these points but they are big drivers in pushing markets higher in short periods of time...more than most would expect. The consumer gets more confidence, the wealth effect kicks in again....for the near to intermediate term and corporations had already cut back. Makes for a good recovery in the economy. These factors just feed upon themselves. I am still waiting for MSFT to break above 70. A breakout past 70 to 72 range would be very positive for the Nasdaq. The old large caps that have been buried in the past few months are also coming back to life. MSFT breaking out would make Naz 2800 look like a very easy target. BTW--I am going to wait til it gets close before lightening up a bit. Might actually sell some of my aggressive positions at Naz 2500 but remain long techs but with less risk. However, I have lots of time to rethink the situation as we get to Naz 2500..plenty of time to change my plans. It is hard to make a firm long term plan (1 year or longer) and that is why I am playing the shorter term moves (1 day to 3 months).