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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Paul Shread who wrote (28407)	1/25/2002 12:26:40 PM
From: jjstingray	Respond to of 52237

Agreed 100%. Ultimately this is going to be the catalyst to drive the market lower. In the very very short term, it looks like we may go higher. More distribution before the demise of the market. Possible retracement to 1750 area.

To: Paul Shread who wrote (28407)	1/25/2002 1:31:11 PM
From: t2	Read Replies (1) \| Respond to of 52237

I think the market hasn't begun to fully digest the Enron implications. It really exposed The Street's credibility problem in a way that Middle America can now clearly see: analysts, auditors, company officials and regulators all looked very bad on this one. Congress too. I see it as already happening. I would note that there is skepticism about earnings with all those charges and pro forma stuff. The preference appears to be for old economy industrial stocks that have been around for years. I believe this trend is about to develop. The one thing that seemed to be holding down some of the industrials was this asbestos fear. Now, there is talk of dealing with this through legislation, possibly. Old economy stocks certainly use pro-forma earnings a lot less; even when they use them, there still appears to be positive net income and cash flow from operations. Also strong dollar pushing money into discount retailers as they buy lots of their goods overseas--asia. Tech is just too risky even with a low interest rate environment. If industrials rally, sure tech can get dragged along higher...liquidity, short covering etc... That is how I see it. I do think the individual investors have had a change in their appetite for stocks; now interested in such things as PEs. Money market funds (risk averse investors) can probably go into low PE stocks but unlikely to try the high growth technology stocks. (there are some value techs). Industrials, discount retailers, oil/gas/energy also benefit from the idea of a gradual recovery whereas techs would be considered very overvalued unless there is a "V" shaped recovery. Therefore, investing in lower PE growth stocks makes sense in this environment. that said, I also get the sense that short selling has really picked up lately on tech stocks...and this can provide some temporary lift. A lot of the increasing in shorting (speculation) that took place in the last 2 weeks won't even be reflected in the numbers out Monday. sorry about the unorganized post; JMHO.