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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: Trader J who wrote (4345)	1/14/1999 12:04:00 AM
From: Trader J	Read Replies (2) \| Respond to of 56535

Market Recap for 1/13/99: Lets ignore the action from today as everyone knows what happened here. The action was evident, the result not surprising....at least to me, and we ended up about as could be expected. Let me be the first to say this may go down in history as the most eventful 3.00 drop in the NAS in history. WOW!!! Lets not ignore though the warning shot that was fired and lets look to see what we can expect for tomorrow. Firstly, what is it going to take to impress the street with earnings? Nothing....it is a losing game here with the Inets and should not be gambled with, unless you know something. Only the biggest blow-outs seem to move these issues anymore.....complete surprises is the name of the game. And do not be fooled just buy the Brazilian devaluation, YHOO was trading down a pretty penny after their earnings, there was disappointment on the street. Very dangerous for the future. The warning shot - Inet valuations are extreme, this is not news. What is news is that many, many, traders and investors experienced that bit of reality today. The first shot is never bad, just a wake up call. As you saw as the NAS slipped below -107.00, many traders and investors alike saw value and gobbled up net stocks at a frantic pace. This market is run by traders and the MMs, all are in bed together but don't necessarily get along. The market sell off after rallying through +30.0, was a relatively easy call for those that trade and study the pyschological factors that move the market. When the bottoms are taken by traders and a large rally follows, especially in days of extreme uncertainty, the rally into the close is almost never sustainable. Not many would risk being in at close to await the "morning after". Most did very well that bought at the bottom and, as a true trader would, sold into the strength as the market neared the close in the golden hour .... locking in the gains. So where to tomorrow. Most are forecasting weakness and although I agree with this prediction for the most part, I believe it will be short lived. Many of the smaller Inets and related issues traded their floats today, or at least a large percentage. For many issues, the float "turned over" or changed hands to a point where most holders are in below, or just above, the closing price of many issues. This will remove much of the volatility for days to come....at least to the downside. I expect to see some "uncertainty" weakness and that may well drag the markets down modestly. But, the Inets remain hot and will still be in play ..... and for their part, I see the markets ending significantly higher tomorrow (1/14). However, another shot at the confidence of the Inets IMO, could be disastrous. Although investors have a very short memory, two successive corrections is about all that is needed to wake up the reasoning half of the market. Traders and investors alike will not want to experience deja vu and could spend some significant time away from the Inets should another valuation scare appear. Take caution out there .... and trade well. Trader J.