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

To: bearshark who wrote (38805)	3/20/1999 5:08:00 PM
From: Vitas	Read Replies (1) \| Respond to of 94695

Shark: Birinyi's comment in Barron's on non block versus block activity: "Q: What about the market? A: The best indicator of the future course of the market, bar none, is the non-block trades in the Dow stocks. Q: Say again? A: These are trades of less than 10,000 shares. These are trades by the specialist, the options trader, the corporate executive and so forth, in the Dow stocks. They aren't buying blocks of stock. They're buying the odd 500, 1,200, 1,500 shares of stock. So if the specialist or market maker sees a lot of buying or buying interest in Citigroup or Compaq Computer, he doesn't try to buy the big blocks, he tries to buy the bits and pieces so he can then sell it to the big buyers. And what their activity is telling me is that, in all the corrections we've had, all the declines, these knowledgeable people weren't selling -- they were only backing off. Don't forget, they see the bad news too. And basically, they were manifesting their faith in the future, using their money. There really has been no selling. Q: What would you sell? A: Most stocks don't look terribly interesting, and would probably just go along with the market. I would sell the small oil producers. I would sell the small banks. I would sell retailers, with a couple of exceptions. And I figure I would sell the airlines here. The move they've had isn't supported a great deal by a lot of buying. And I would sell most small stocks, most of the Russell 2000 names. Their day will come again, but not this year. The market looks out three to six months, and even at the end of that period, we still see no interest in these. One of the reasons is demographics. Today, the 50 biggest mutual funds account for 10% of the mutual-fund assets. Ten years ago, they accounted for 5%. Bigger funds have bigger positions. Alaska Air may have compelling fundamentals and look good on your quantitative screens, but for a $10 billion fund, it is just not going to cut it."