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

To: LTK007 who wrote (77666)	5/31/2001 8:20:58 AM
From: t2	Respond to of 99985

there are many ways to put cash to work without buying tech stocks. Money is learning to change it's flow,and it is out of many techs. I feel you,and all,must stop obsessing about techs(except to dig out those few that that have special positive circumstances,and think the whole of the market place.) I feel large segments of the tech sector are at least a year away from recovery.imo.I have heard several funds say they have used this rally to drastically reduce their exposure to techs. True, there are other places to put the money also. Diversification is good. I had done it. Now I am starting to concentrate on tech stocks again, now over 70% technology after yesterday. Did lots of trading yesterday. What I differ on is the timing of the switch out of technology. I recall Louis Navielier (CNBC guest host) made some comments late Fall and early this year on tech stocks. He stated that traders (shorting) would go after stocks that funds like Janus would be holding and that these types of funds would also face redemptions. I am sure they did. My point is that story has already played out and the big funds may now be underweighted technology--Fidelity is for sure. The question is: What happens when Fidelity and other big decides that maybe tech has bottomed and it is time to increase weighting to market weight. Certainly, most of them are not looking to further decrease tech weighting as they are already underweighted. Fidelity is likely to increase tech holdings as not doing so could turn into a costly gamble. The same type of gamble Janus took on going very overweighted in technology and bombed! The reason is this significant is that big funds won't buy every stock they want in one day. It will be a dollar cost averaging type of approach. Furthermore, they know how Janus dumped so much Cisco in the first quarter...that would mean that those that got out early would now be looking to own it as the potential supply decreases from big funds dumping tech. This is just an example of why buying technology is a good idea. Also take a look at the short interest in the various sectors and you will see that the biggest positions are in technology. No one seems to expect an explosive move in the Nasdaq; people are talking about retest of lows. At least the bearish sentiment has increased significantly after this drop down from almost 2300. Using SUNW's warning to paint the picture in the tech world is erroneous, imho. To me that means we get an explosive move up on the Nasdaq very near term! It is not the same situation we saw back in the first quarter of the year although technical indicators may point to downward moves. Remember when the Nasdaq got close to 2300, TA was indicating a breakout. It did not happen. IMHO of course. btw--ready to ride out some short term weakness; not putting in stops on my trades anymore.