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

To: Chris who wrote (7607)	4/17/1998 6:06:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

I took a quick look at today's market results and saw that the techs did not participate in this move up by the market. This sector was not on the leadership list and the NASDAQ posted mediocre gains. We still may be in a consolidation phase for the S&P 500. But if the DJIA continues to do well, I think it will have its positive effect on the rest of the market including the S&P 500. I do think the S&P 500 is the key index to watch in this market in order to help determine what the funds are doing with their money: buying into this market or selling it. Over the past several days, I have seen some evidence of fund money moving back into the market. My observation first began with the DJIA which represents both local and foreign money, and now I may be starting to see this with the S&P 500. I still do think Judy is right that the funds will wait for some more key earnings reports to come out with forward guidance before making an aggressive comittment of funds. At least for the time being, the earnings reports that have come out so far I think have allayed market fears of the Asian impact on corporate earnings, where key companies have met and in some cases exceeded their (adjusted) earnings consensus estimate. IMO the funds have been helping to keep the market from a further retrace. After all, they saw a record $37 Billion inflow of new money which they need to find a place for besides the money they have on the side as the result of their previous sector selloffs. I think they started early to place money back into the market in a selective fashion instead of parking it all in cash. But with a surge in the S&P 500 in front of the move up by the DJIA, the funds may be getting more aggressive in stepping up to the plate with their purchase orders during market selloffs like what had happened earlier today. If it were not for the volitility that happens around expiration time, double witching in this case, I would say what I am seeing now is a positive sign. I think next week will tell where we are heading for the near future which may be a continued consolidation. Remember that the S&P 500 has outdistanced the bull run of the DJIA, and now the DJIA looks like it is catching up. Once again I have not been following the market as closely as I would like to, so as usual I encourage any feedback. Bob Graham

To: Chris who wrote (7607)	4/17/1998 6:12:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

This market cycle that is being driven by liquidity has turned some of the technicians and market "gurus" on their head. Some of the better more adaptable ones were quick to note the change in the market, regroup, and change their outlook. I have even seen one here at SI pull their money out and kept it for for a long period of time out of the market, at least in comparison to their short term trading status. During times like this you can tell the technicians and market analysts who are good from the ones who claim they are good but really are not. Unfortunately, each bull run generates it share of "experts". A few individuals may even have good performance records during a particular shorter term bull cycle because they have "clued" into a pattern that is either entirely technical in nature or a short term pattern of money flow like in terms of earnings and split plays, both which have their favor during different parts of the longer term bull market cycle. But the market is constantly changing which means these patterns will also change. That is why many if not most "gurus" only last through one if not only a couple market cycles. It is only two kinds of market technicians that survive: the very experienced and the market players who are less experienced but sharp and observant and adaptable that see the market as a constant learning experience, which it is also to the more experienced market followers. In this way the less experienced market analyst can survive through their learning curve. IMO there is no such thing as an experienced market player who is not adaptable. The shorter their trading window is, the more quickly they need to adapt in order to survive. So markets that quickly change their character allows the rest of us to evaluate the real credentials of a market "guru". The example given above where the change is that of a fundamental nature is one such opportunity. Another opportunity is when the market gives mixed signals in the middle of a consolidation like after a significant pullback. The last opportunity of this nature was presented itself to us in November. This is when there were many mixed signals in the market which were throwing around even some more experience technicians. There were even some "experts" here in the limelight at SI that even entirely missed what had become obvious signs of the pending market pullback. By all means avoid following this type of expert. When the market is favorable to their approach, they can do very well. But what is important is to be able to retain the profits made in this way by being out of the market before a significant correction happens. Also it is important to continue to do well in different types of markets. Both are essential in order to survive trading in the market, which requires good market knowledge and experience to be able to execute reliably. Many of these "experts" do not qualify in this regard. And it is the changing market that separates many of the so-called experts from those who will survive and continue to be successful well into the future of this market. By the way, whatever happened to GroundZero? I have just purchased a book that includes the Andrew's Pitchfork which reminded me of him. I enjoyed his contributions on this thread. Bob Graham