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In a message dated 3/16/00 3:34:53 PM Pacific Standard Time,
Proffittak@xxxxxxx writes:
<< today was also DEFINITELY the unwinding of expiration day
AND for sure caught a lot of day traders who ran to cover their shorts. >>
Ben,...My thoughts:
The BIG trade of institutions and hedge funds has been Long NDX
and Short SP500. Past two days has witnessed unwinding of this
trade,...with violent forced buying of S&P500 and selling of NDX.
What has happened is "real",...the question is ....is it sustainable,..
will the Dow and S&P500 continue higher from here?
I think not. Once shorts are covered,..we can be free to decline
again. Last week I did a post looking for LOW 03-14,...a HIGH 03-17,...
and a LOW on 03-21 (actually 03-21 to 22 looks to be a pivot). It
would not surprise me to see a reversal of sorts tomorrow. The media
will have a bunch of explanations,...etc. But,...psychology is overly
complacent,...and future interest rate hikes cannot be constructive no
matter how much they have been discounted.
I saw Steve Shobin (Lehman Bros) last week on CNBC (I repspect
his work alot),...and he was constructive as long as NASDAQ retained
leadership role,..in particular Cisco and Russell 200 as bellwethers.
Clearly that has not happened and key uptrend support has been broken
in the "New Economy" stocks.
We had a bounce something like this back in April of 1999,...and
cyclicals jumped 4% in two days,..etc. very similar to now. It is
interesting that the NASDAQ tended to do well from that point,..while the
Dow and S&P500 struggled in sideways to up for months,...in other words
there was little follow through after the market had shot it's load. I think
we are seeing that again here,..and fully expect trading range (as opposed
to trending) activity for the S&P500.
Just my thoughts,...any feedback appreciated.
Regards, Jim Pilliod jpilleafe@xxxxxxx
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