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

To: Chris who wrote (6660)	3/8/1998 1:36:00 PM
From: Robert Graham	Respond to of 42787

What is the technical picture on the indices, key stocks and sectors, Chris? Do you see evidence of a pattern of distribution? From what I have been seeing, there is more evidence of accumulation by the fundies buying on the market dips. The funds have demonstrated more caution in the market recently which some may interpret as pessimism. There still appears to be a fair amount of bullishness by the market traders. As soon as the big money leads, the traders are quick to jump back into the market. I would be very surprised if the DJIA moved below 8000. If it did, I think such a market slide would have much longer market implications. I am concerned about the upcoming earnings reports as the market may be too. This is when we will find out the extent of the Asian problems. This is a traders market and no place for longer term investors right now. The fundamentally oriented players in the market are much more pessimistic as evidenced by the Briefing.com shift toward a more bearish short and intermediate term market outlook. The market needs to move past this earnings season before any additional gains can be had. There will be those inexperienced traders that will continue to treat this earnings season like they usually do any other quarter in their agressive earnings plays. They do not realize the market has been changing on them. All they need to do is look at a recent breakdown of their equity curve to realize this. Risk is becoming a better part of the measure in its relationship to possible gains with such a play. I have looked over the recent successes of one of the more popular traders who banks on high-tech earnings plays for their success. This trader's success rate has dropped from about 70% in the previous strong bull market to 50% with multiple days that came in less than 50%. This trader still continues to play their same old game. I guess what has worked in the past will continue to work in the future, right? The market does and will continue to change as it works itself through its cycle. This can be counted on. The trader needs to adjust their game plan accordingly. If I were this type of trader who has made a living on high-tech earnings plays, I would be looking to change my game plan. One of the fundamental problems with making money through earnings plays is that the trader is only learning how to make money on the long side. In order to continue to be successful, the trader needs to be equally as successful making money on the short side. Words to the wise. Bob Graham