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

To: donald sew who wrote (11127)	4/15/1999 1:57:00 PM
From: Cents	Read Replies (2) \| Respond to of 99985

OT Donald- This "New Era" idea that's being thrown about...does it mean that stock fundamentals no longer matter? My feeling about this market is that new investors are coming into it for the reason of rising stock prices. Even though the stocks are overvalued, could it be that we will always have rising prices due to short covering and squeezes after days and weeks of doom and gloom? It's so much more of a mind game now. Can it be that the very analysts who are spreading doom and gloom and overvaluation theories are actually bullish at heart and are short-term profit takers and are waiting with money sidelined to squeeze out the shorts especially when things are looking the bleakest? My guess is that we can have a couple of more upside breakouts before the "true" bears stop shorting the market no matter how tantalizing, and there would be no squeezes to take the market higher, and from there the "New Era" thinkers will surely take profits and that will be the onset of a bear market. New traders will say that they're holding long-term, but until we hit the bear market their hold tolerance will weaken, they will sell at a loss, and with not many savers out there.....voila, we'll have the cascading effect downwards. Of course this is just my opinion. Yes, trading is easy and many are doing it now, but I don't think many are using play money. I would hate to see the rate of bankruptcies go higher should the market start to head lower due to lack of shorting interest. Regards, Cents

To: donald sew who wrote (11127)	4/15/1999 3:38:00 PM
From: John Pitera	Read Replies (2) \| Respond to of 99985

Don, I wanted to mention that the Morgan Stanley cyclical index CYC.x has moved to the 570 level that was the previous all time high set back in april of 1998. This is an area that should provide resistance, and some E-wavers would consider it a completed "B" wave. Clearly the cyclicals have run-up so much they are vulnerable to a pullback at any point. Several of these companies say that fundamentally business is not looking that much better. Anyway you may want to take a look this. It is important to note that in an idealized Bull market the cyclical issues advance at the end of the cycle to cap off the Bull Run