Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (3586)	3/11/1998 10:03:00 AM
From: Tunica Albuginea	Respond to of 18016

Pat, market activity: from Microsoft Network news: Bears Run for Cover in Face of Bulls' Ascendance By Aaron Task for Investor and MSNBC NEW YORK -- There are few things in financial markets more powerful than capitulation, save perhaps momentum. Both those intangibles came to the fore Tuesday, helping the Dow and S&P 500 sally to new highs. The concept of momentum is probably self-explanatory, especially these days. Capitulation refers to the practice of a group of investors who, after suffering heavy losses, finally give up on entrenched positions in a given market. Traders said there was evidence Tuesday of market bears crying "uncle" in the face of all the upward momentum on Wall Street, an occurrence likely to lead to more records on Wednesday. "Across the board as far as industries go we had buy orders today," said Jim Herrick, managing director of trading at Robert W. Baird & Co. "Ironically, institutions usually wait to buy on the dips. Today you didn't see that -- [the buying] grew steadily all day." That kind of momentum at the close should at least guarantee a "solid open" Wednesday, Herrick said. The trader refused to make predictions beyond that, but said, "Right now, with some of the first quarter pre-announcements out of the way, it's going to be tough to have this market sell off." With no major economic data or corporate earnings scheduled for release, the market should trade on its own merits. Worthy or not, that should lead to more gains. In addition to the old saws about money flows, low rates and inflation, and a lack of better alternatives, Greg Smith, chief stock market strategist at Prudential Securities, offered another factor behind the recent run-up -- a force unlikely to change anytime soon: entrenchment. "Increasingly, portfolio managers are equity specialists," Smith said. "If you sell your tech stocks, you have to buy tech stocks, because you're not supposed to be out of the market." But Smith is far from ebullient about the market, believing that the fact the "earnings story is decidedly less strong that its been for the last three years" will eventually weigh on the market. Smith also observed that "it's a little misleading to look at the Dow and S&P 500" as the arbiter of the stock market, because both indices can be moved by a handful of stocks. "In the aggregate, the market is doing pretty nicely, [but] the broader market is still kind of struggling. A lot of stocks are nowhere near new highs," he said. "I'm not bearish, but I don't think we can remotely get near what we've done in the past three years in 1998." That, of course, remains to be seen. For now, the path of least resistance appears to be heading inexorably toward Dow 9,000, and beyond. TA