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

To: James Strauss who wrote (11255)	4/16/1999 5:05:00 PM
From: donald sew	Read Replies (1) \| Respond to of 99985

Jim, >>>> We are probably seeing institutional money hedging their bets by reducing their large cap high tech exposure for mid cap and low cap value stocks... As an example, selling 10,000 shares of AOL @142.00 = $1,420,000 available for small to mid cap purchases... If that money goes to buy stocks costing $25.00, you can buy 56,800 shares of these small to midcap stocks... Multiply this by the hundreds of millions of dollars and more, and you can see the huge amount of money that is beginning to flood the small cap and mid cap sectors... <<<<< That I fully understand. I go back to my earlier post to you today when I mentioned the rally in the in the small-micro caps/NAZ back in the spring of 1996 before the correction. This time its the small caps/transports/DOW stocks running now while the NAZ sells off or remains flat(in case the NAZ bounces up some but does not set new highs). In 1996 the DOW remained relatively flat, so this time the NAZ/BIGGER HiTECHs take that position. Wonder if the market is just replaying the 1996 senerio with a few amendments. As so many say, follow the trend, and the trend is now small caps,transportation,DOW. The broadening of the market is still good in the long run. If there is a correction soon, it will probably be only that - a correction and not a bear market. So if it occurs and when it bottoms its a good buying opportunity. So the question now is - if this pattern of moving the money from the BIG NAZ to the small caps/etc continues - how long can it last. We also need to keep in mind that the IRA $$$ has ended so the inflows may not be as strong in the future. If we use the 1996 analogy - it may not last too long and end up in an correction. seeya