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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4024)	1/14/1999 11:57:00 PM
From: James F. Hopkins	Read Replies (2) \| Respond to of 99985

HI John; It's due to so many new index funds, and the way they are weighted. To get to any reasonable balance, the market has to melt down the super caps and that didn't really happen on the last down turn as strong as it was. Any rally and new money coming into the indexers and they have to toss most of it at the nifty fifty..then we had the tulips running, and running hard baiting people to that sector..so while some money came out of the blue chips to chase the tulips in the internuts , at some point the indexers have to sell off the nifty fifty, ( nifty 25 is more like it today ). But once these sell down, other funds see that they have to raise cash, as the down momentum starts the thinner traded stocks ( which have has some gains start to sell off, getting money out of them is harder than out of the blue chips. --------------------- The fact is there is no money IN THE STOCKS, if at any time people try to get even 10th of what they represent the market could go to damm near zero. We need a flow of new buyers all the time or it sinks of it's own weight due to the over head, that's why looking forward I say good paying jobs with 401ks are so important to the market. With book values of most stocks so low the market is just a glorified ponzi scam, on top of that the way they find book value would make a prostitute blush, every thing is like a layer cake , and the so called book value can vanish if a real run on the market happens. ----------- There are a lot of things GreemSpam knows he's not talking about. The BK will happen some day, I'm surprised they have pulled so many rabbits out of the hat as it is, but the National debt curve is going up a lot faster than the birth rate, and at some point the next generation will be so far in debt that no one will lend any more money. All the rats that arranged it will vacate to the lands of the very rich and look down their noses as the country tears itself to pieces. Jim