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

To: Zeev Hed who wrote (80837)	7/25/2001 9:27:03 PM
From: t2	Read Replies (1) \| Respond to of 99985

expecting a bounce of between 40 to 75 points on the naz by tomorrow or Thursday. I am down to 44% cash from more than 70% on the close. I hope I am right, but will not stay too long, I still have the 1850 area as a target for early August and the low 1600 for late August. I guess that means you are looking for a retest of the April lows. I am looking for a rally near term--5% to 10%. It is scary betting against you.<g> Did you notice how the Euro has been strengthening very quietly recently? That has far too many implications for many large cap technology stocks. Europe is generally very slow in the summer anyways. When economic activity picks up this fall, it may be accompanied by a Euro that is stronger than had been factored into earnings estimates. -for example--IBM That is a key development that could tilt the balance in favor of a rally. It was a huge factor cited for the lack of a recovery. Instead of talking down the dollar, which is considered not a good idea, it appears they don't want to talk it up. ...resulting in a very quiet weakening of the dollar accompanied by stabilization of emerging market currencies as well. A Goldman Sachs economist today suggested that was a good strategy --some Washington hearings. That is enough additional data for me to believe that we at least have a stable market. One that could have established a new base to rally from. Also think the global market weaknesses and lows being set, also suggest a short term bounce at the very least. Of course, I am factoring in other reasons for the short term bullish case: - big short interest(NYSE and Nasdaq) increases in July; fund holdings and some evidence of higher cash levels in my sample check; money market funds still increasing; skepticism among so many bulls and bears alike of any chance of a significant rally--they threw in the towel. GDP (Friday) is not expected to be negative and could also be a big catalyst for the market as someone had suggested--even to rally ahead of it. Of course, there is a small chance of negative GDP and that would not be good..willing to take that chance. I have not noticed this much bearish talk on the markets since the end of March. Back there was also the factor of selling for tax reasons (creating an urgency) but now there appears to be just a lack of interest in the market. That could explain why the contrarian indicators like p/c and volatility is lower. With the shorts still increasing, the short ratio is going up faster with the lower volume. That is too many reasons to buy right now and hold out for a short term rally. Lets see how it unfolds near term. IMHO