Scientists have answered the old chicken-and-egg question once and for all (the egg -- or so we've been led to believe -- is first). Wall Street strategists, when it comes to stock flows and stock movements, have done us no such service.

Isn't it the flow into the market -- new money into mutual funds and trading accounts -- that makes stocks go up? Undoubtedly, this is true. There is more than a little sense to the pat phrase, "There were more buyers than sellers," that traders offer after a day when stocks moved higher and they don't know why. But what was it that attracted the new money to the market in the first place? Often enough, it seems it was stocks going up. Think about this stuff for any period of time, and you begin to feel like a kid trying to work out the relationship between Rhode Island reds and grade As -- without the benefit of Mendel.

"It's something we'll be watching for market signals from," says

J.P. Morgan

market strategist Tom Van Leuven. "But it's tough to say much about cause and effect between market action and mutual-fund flows, because they're pretty coincident."

Nevertheless, there are some trends in fund flows which -- though not constants -- are fairly good rules of thumb. Flows generally taper off through the year, with the first quarter strongest and the fourth worst. (Last quarter's strong flows were an exception -- and were one reason the late-year rally was so huge.) January is one of the biggest months for inflows, as 401(k) and bonus money comes in. And when the ides of April and the tax man beckon, flows ease -- partly because of tax selling, and partly because after April 15, you can no longer book IRA contributions to the previous year.

These things -- the strength of the first quarter, particularly January, and the falling off that comes with spring -- can make for a softening of the stock market in the second quarter.

"Some of the best gains that happen in the market occur from November to April 15," notes Steve Goldman, market strategist at


in Greenwich, Conn. "If you look back at last year, a lot of the strength was in the first quarter and the last quarter."

Not just last year. In 1998, the

S&P 500

didn't make any headway from late March to late June. Stocks saw a sharp pullback (facilitated by a tightening


) in spring 1997.

Flows and the S&P

Source: Investment Company Institute, Baseline.

So far, it's been a banner quarter for inflows. With nearly $40 billion coming to market, according to the

Investment Company Institute

, it was the biggest January ever. Initial estimates suggest that that performance has continued up to now: $3.2 billion came into U.S. equity funds last week, according to

, and $5.2 billion came in the week before that.

One of the things that's interesting is that the

Wilshire 5000

, the best measure of overall market performance we have, is flat on the year. Part of the reason for that is pretty well known -- tech and aggressive growth funds have seen huge inflows; everything else is seeing outflows. That's why the techs have done so well this year, while other stuff has not.

But the more worrisome thing is the general implication: Despite a ton of money coming into mutual funds, stocks are flat. The money that's coming into the market is getting taken right back out. That suggests that if inflows let up, as often begins happening around this time of year, there could be trouble.

"If flows slow for any reason," says publisher Charles Biderman, "the stock market should stick its head between its legs and kiss its

butt goodbye."