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Strategies & Market Trends : Trading For A Living -- Ignore unavailable to you. Want to Upgrade?

To: Eric P who wrote (1617)	4/19/1999 9:54:00 PM
From: William W. Dwyer, Jr.	Respond to of 1729

Eric, Following on your excellent market commentary and warning of possible increased volatility, I would like to suggest that the today was really a big, much needed transition day for the market in general. Recently the tech stocks have had an amazing run up, too much too quickly, imho. It had to stop to take a breather. Those who took profits and stepped aside from tech stocks on or about April 13 were smart or lucky or whatever. Not greedy, maybe. I was out of techs April 7, just a tad early. Around April 7, however, the attention and interest began to shift to the blue chips. Everyone realized the Nasdaq was over-extended, overbought. No big deal. In fact, some internets had run up to unrealistic, almost absurd levels. Continued momentum could not be sustained. With the Nasdaq retreating steadily since April 13, traders have been waiting to get back into tech stocks. Everyone knows the total market cannot proceed to climb without tech stock participation. The brief flurry into cyclicals was only temporary because traders and investors needed something to own while techs pulled back. But no one seriously believes the cyclical stocks will be able to keep the market rallying without the help of the technology stocks. It is hard to get excited over a move in aluminum or heavy machinery stocks. Today the market opened up and surprised most everyone. And it was up big, all excepts techs. So, those with big profits naturally took them. Those with big losses took them as well. Everyone just wanted to get out and wait on the sideline. The market needed today as a normal transition day, waiting to see how sector rotation plays out and which sectors will rally next. In fact, I think we need maybe one more big down day soon to satisfy everyone that the fat is out of the techs. Soon as everyone believes that, you can bet there will be some bargain hunting on the Nasdaq. And what bargains there are! The solid techs (internets included) should rebound sharply and soon. AOL, YHOO, AMZN, CMGI, and of course the internet brokers we all love to buy. They will present us with some incredible buying opportunities, the opportunity to make even more profit in them than we did this past quarter. The next few days should be interesting, good days for good daytraders, and good days for astute position traders who wait for the right moment and have their shopping lists ready. Then, again, maybe I'm wrong. :-} Bill