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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Sergio H who wrote (20154)	3/9/1999 8:33:00 AM
From: j g cordes	Respond to of 69928

Serg.. its a divided market. Assets are not spread equally among sectors, in fact they're not spread consistently according to growth either. One observation, as you point out, is that "... share price index of the Small Cap Growth index has declined by 35% relative to the S&P 500 since the August, 1997 high.Current relative price to sales is near the lowest level in the record of the index." This leads some to speculate the market can go much higher because the lower valuation stocks simply need to rise to proper relative valuations. But I wonder if there's enough money in the system to do that? I'll assume that at every given moment there is a large but finite number of dollars in all markets pressuring the bid/ask price up and down. The money can chace a nifty fifty or be spread out across many sectors, but perhaps there isn't enough to cover all the markets to any logical depth of relative price to sales. Is it possible to have the SP500 at a PE of 34 and expect the rest of the market to catch up? Or has the focus of valuation into narrow groups of stocks created buildings without foundation? Jim