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

To: StockOperator who wrote (9865)	4/5/1999 3:30:00 PM
From: StockOperator	Read Replies (2) \| Respond to of 99985

Time to see where the smart money is going to take us. A close above 10003 would say much. YHOO responded pretty well to that "do or die" position on its chart that I pointed out. SO

To: StockOperator who wrote (9865)	4/5/1999 6:59:00 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 99985

well,here we are at fresh highs. and still everyone's complaining about poor breadth, poor new high/new low ratios. caution and disbelief still reign. witness bear stearns cutting equity allocation from 60% to 55%, witness dick mccabe of merril lynch predicting a 20% correction for the umpteenth time. mind you, i'm certainly not a permabull, but on current evidence i think we're going to go higher still. one thing that bears watching is the yahoo earnings report later this week. it usually marks a short term top for the net stocks and it would coincide nicely with what's being said of a cycle top being near. i said i would talk a bit about laszlo birinyi, so here goes: birinyi espouses a very interesting point of view: he denounces technical analysis in general as being merely descriptive. he insists that the only tool of predictive value is money flow analysis, which is of course what he does. based on this, he makes predictions about where the djia should be by year-end, which sound outrageously optimistic by the time he makes them and then invariably come true (so far anyway). his current prediction for 99: dow 12,000. honestly, i don't buy it. but i didn't buy it last year, the year before that... anyway, i'll list again the ten stocks with the strongest flows according to birinyi: aol,axp,aapl,sch,f,ibm,jpm,lsi,mer,mot. the ten weakest are: all,arc,bfo,cpb,hrs,may,ncc,nyt,oxy,wag. so whatever one thinks about his prediction for the dow, he sure picked some scorchers. lest we get too carried away with birinyis optimism, here is what bob prechter and his troops predict: marginal new highs, followed by a decline that carries us all the way back to the october lows, maybe even lower. to them this market equals mania. considering how pervasive the stock market has become in everyday life, they probably have a point. their biggest problem seems to me that they have been saying this for a long time, and the market just didn't care. i will say this: if and when a bear market finally comes it will probably not be recognized as such when it starts, and it will be very painful. we know already that a 20% decline is not enough to shake the faith of the average mutual fund investor, but i suspect that anything more than that might well do the trick. the 'long term investor' is a myth. after all, the buy and hold strategy touted by all the wall street firms really only works in an extended bull market and it definitely ceases to work once such an extended bull market ends. just ask the japanese, they know a thing or two about that. people often tell me that today's market cannot be compared to the 1920's. the truth is that the parallels proliferate(i'll go into more detail some other time). enough gloom! just looked at today's put/call ratios: equity: 0,40 ; oex : 1,50 ; not wildly bullish, but definitely constructive. oex put volume in recent days definitely reflects the mood of caution alluded to earlier, so near term, higher prices are indicated. greetings, blasnik