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

To: The Freep who wrote (78598)	6/13/2001 2:45:06 PM
From: 10K a day	Respond to of 99985

:O)

To: The Freep who wrote (78598)	6/13/2001 8:35:29 PM
From: t2	Read Replies (4) \| Respond to of 99985

Freep, It looks like the economy recovery may take longer than expected. I am starting to take your bearish outlook in the near term, seriously. The strong dollar is also making it hard for US techs. That is not good for the growth stocks---Juniper types. However, I still don't buy the inflation argument at all. If Greenspan keeps cutting and I feel confident about that, the bond yields will keep heading lower. I realize there was hesitation initially in the bond market after his first few rate cuts. It seems the bond market has been coming around to the sharp slowdown without inflation scenario. That is how the stocks can go up; the value stocks become more attractive than bonds or money market funds. We may get more asset allocation changes. Of course the definition of what is value will also change as the rates go lower. Maybe some techs like MSFT get considered as value stocks; especially if they have large cash balances; and very valuable important intellectual property that is hard to displace...especially in a weak economy. In fact, a Microsoft type gets stronger in such periods. There is little doubt that is exactly what happened as the internet bubble burst. Basically, we may be back to the old market of last fall and early this year; the stocks that outperformed during that period may do so again if a particular group has dropped recently...not sure about energy stocks though. I would note that Cramer in a story indicated that Fidelity was buying tech stocks while they were actually talking negatively about the sector. I had suspected this was happening...was actually very repetitive on this. At least I was right to speculative on what funds that were light on technology stocks may have been doing. Question is how much did they buy and how much will in the coming weeks/months. If the market stays near these levels or goes lower, there is little doubt that Greenspan will cut by 50bps, imho...especially if the profits and economic numbers suggest that a second half recovery is less likely than it was a couple of months ago. He does not seem to want to take any chances with this economy even though the "experts" seem to think he is about to end the easing cycle. These rate cuts are probably what will keep the market in a trading range or possibly give it a lift. I am now just adding the possibility of a decline if by chance tech is being overbought. On the bright side, few tech IPOs or secondaries from techs...Becomes a supply and demand issue. However, we have not seen many buyback announcements or takeovers. What will be interesting is how the market does in the warnings period and how much of a bounce we get in earnings period. A weak warnings season means we get a strong market into July. Basically volatility that creates trading opportunities. I still think we get a rebound late year in certain tech sectors like PCs. However, my problem is that the present market may not agree with me.<g> ...and I am here to play market expectations. BTW--I am not turning bearish on the market and am still long certain technology stocks and sectors but for the long term. Just getting a little cautious for the near term.