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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: puborectalis who wrote (10763)	5/11/1998 4:05:00 PM
From: Robert Graham	Respond to of 14631

Yes, I agree. I see there has been an underlying but growing segment of the market with pessamistic sentiment toward the market. The fear looks for rational to justify its existence which is typical. That has been found in concern over rising interest rates through Fed intervention. There still is a pretty positive speculative segment of the market as the response to Friday's jobs report has revealed. However, this group only can work their exhuberant "magic" on the stock market only so much without support from the larger institutional interests. We seem to be continuing in a trading range for now where IMO it is possible for the market to retest its April lows. Apparently the institutional monies is taking a much more restrained posture to the markets. I do think large amounts of cash is still there on the side lines, but for the time being the liquidity in the market has been drying up. The start of this was in evidence when I saw the funds parking their money in select stocks that are second tier issues in the tech sector. Also there seems to be money flowing to the bonds right now which is a more defensive posture to the stock market which can further soften the market and facilitate further consolidation. IMO the market is working itself through stages of denial that relate to a slowing earnings growth and the slowing economic environment that this can portend. The general slowdown in earnings growth of the S&P 500 along with the selloff of the market's leading sector, the tech stocks, I think is what set the stage for this negative market sentiment. As a consequence, the market has become more volatile and has ended up "rolling over" into a market adjustment and consolidation period. I can understand why some are seeing this as a top forming to the market. However, as long as there is money in the form of cash available from institutions like the funds, the market will continue up. This year has seen a new type of market which is primarily a liquidity driven rally. I find that the market has changed in its character which has thrown many people, even some of the more successful technicians and traders, in their attempts to understand this market. Just some thoughts. Bob Graham