I think what you are seeing today is classic end-of-the-quarter window dressing. At the end of a quarter, when mutual funds holdings are published, the funds have a tendency to re-position their holdings into stocks that have been showing recent relative strength. That way it looks like the fund is in all the "right" stocks when their portolio goes public.

So today you are seeing particular relative strength in names like YHOO, AMZN, EBAY, NXTL and the like. If I'm a portfolio manager, and I can show that I own names that have been doing well all quarter, I can show the world that I'm in the big winners even though I may have just bought them at the end of the quarter.

Larry

Funny, I never heard of that.

Is that something that someone could plan on at the end of each quarter for a short term call on those stocks?

Dave

Dave,

You couldn’t just buy these stocks at the end of the quarter based on the tendency toward window dressing alone. There are too many variables. For example, sometimes it will happen on the last day of the quarter, sometimes a day or two before. Also, if the market is weak, no amount of window dressing is going to save it.

I do think it can and should be considered as a factor in making decisions. I mentioned in a post a couple of days ago that I thought the market was setting up for a short-term upward spike. I was thinking about possible window dressing, but I was also thinking about the market getting a little oversold on a short-term basis, and I was thinking about the market getting close to some minor support levels.

So, yes, it is a factor, but only one factor among several.

Larry