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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Greg Jung who wrote (18885)	5/21/1998 1:20:00 AM
From: Robert Graham	Respond to of 94695

It looks like the market is taking a more defensive posture in what is being termed as a "rotation": Blue chips and S&P500 = IN Techs and small caps = OUT I guess the funds had to find something to do with their money. They obviously do not believe a market correction is in the works. So they are going for the companies that provide consistency in terms of earnings since they cannot obtain the desired surpreme earnings growth. Now lets look at the big picture here. The market is choosing companies reporting lower but consistent earnings over companies reporting large and accelerating earnings growth, where they are finding it difficult to find this type of company. This together with recent economic reports that have demonstrated mixed signals is beginning to paint a picture different from what the market was afraid of discovering about the economy which is that of an overheating economy. Now, is economic growth increasing or decreasing?? Sorry, only one try allowed at this answer. Hint: I want to note that it is at economic tops and bottoms that the economic indicators will give mixed signals. Hint: A blue chip like a GE is not seen as "high growth" material. Hint: I think consumer staples are getting bought up. If true, I would not be surprised to find the cyclics are being sold off. * Brave Souls Only to Look Below * It looks like the funds are positioning themselves for an ecomonic slowdown. IMO concerns about a overheating economy was just a shared market delusion as it progresses through its phases of denial related to companies having reported slower earnings growth over the past two quarters which was preceded by earnings warnings for a good part of a year before hand. The liquidity this will continue to provide the DJIA and S&P 500 type of stocks that are recipients of this fund money will naturally move up. The techs may continue to get hit, so NASDAQ may not be leading the market into new high terratory. So is this a picture of a "no holes barred" bull run? Comments are welcome. Bob Graham