Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: Jay Lyons who wrote (9304)	2/26/1999 5:21:00 PM
From: AlienTech	Read Replies (2) \| Respond to of 43080

Guess theres plenty of blood to around now. From the Trading Desk - 2/26/99 7:06:29 AM It was a fairly ugly week for most issues. The market nosed dive on Weds., Thursday and Friday, working hard each day in the last hours of trading to erase much of the slide. Yet, at weeks' end, the damage was fairly significant. The Dow closed 9300, having been able to break out to new highs. The more concerning impact was felt in investor sentiment. Bullishness felt to be at record highs. Investors felt they could do no wrong. After rally from 7400 since August's low, the buy on the dip mentality seem prevalent. When everything seems so right, and the market looks to do no wrong, one should be cautious. Looking back on the week, the market is still reeling from Dell's weaker than anticipated revenues. CPQ was downgraded and several analysts cut ratings on many technology issues. Having led the markets over the past few years, when IBM, DELL, CPQ and MSFT take a dip, so goes the rest of the market. Having picked up DAL and UAL last week, it was good to see airline stocks begin to recover after a dismal first quarter. Lower oil prices lead analysts to comment about stable growth in this sector. DAL had two terrific days on reasonably good volume. We continue to add to our position as these issues would appear to have good risk/reward ratios. Oil and oil service stocks were weak. They performed inline with the rest of the market. Service stocks, interesting, were slightly more stable during the past 10 sessions. Perhaps it is because they have fallen too far already, but they look attractive if oil prices can stabilize and begin to improve. Disk drives - Ugly. Semi-conductor - ugly. Box makers - gross. Internet stock - ugly. It begs the question why anyone, ourselves, included would ever get involved in technology. After all, with all great small cap companies out there, each offering rewarding growth prospects, why would anyone want to buy into a company who's products face incredible pricing pressures such that a box that cost $2500 seven months ago, now sells for $650. But technology is compelling. Look for good companies, great management, large revenues and stable balance sheets. Look for a company that can make headway with marginal up-ticks in revenues. And never put too much in any one issue. The market performed as expected. To be honest, I think we called this week dead-on-the money. Downward momentum, light volume, no bidders. I'd expect this to continue until we see some capitulation. While prices have declined, they haven't gotten overly attractive just yet. We will wait on the sidelines, buying good companies, and will look for some more irrational selling as an opportunity to evaluate new issues. We'll wait for some blood to fill the streets.