8-30-01

Charts:  There is not really much to add to what the charts are telling: the markets are under siege! Unless next week we get some catalyst that will help to hold the slide, then the markets will probably break the March-April lows.

SPDRs/Sectors: As we have pointed out countless times, you can count on a regular basis for one or both of the worst performing sectors of the day, to come from NASDAQ. Today -just like yesterday- was no exception1 The message: stay away from NASDAQ, at least for now, if you are a risk averse investor.

8-29-01

Charts:  The Commerce Department reported that the U.S. economy grew 0.2% in the second quarter. The 0.2% figure is the weakest GDP since the first quarter of 1993, but was above the consensus estimate of unchanged and certainly it did not confirm  widely held fears that the number would be a negative one. That however did not help the market  -at least not today! All the major Indexes broke support levels, and they are giving the appearance that they are ready to move lower. It should be noted that there were  positive elements in the GDP data, such as the fact that the downward revision was caused largely by a drop in inventories, which were down about $11 billion more than first reported. Also, the gain in consumer spending was revised up to 2.5% vs. 2.1% and the price deflator was revised down 0.1% to 2.2%.  One can make the assumption that the second quarter could mark the low point, however as the charts show, investors did not care to concentrate on the positives. We do not see what will make them change their minds right before Labor Day. We think the odds favor further deterioration over the next few days.

SPDRs/Sectors: As we have pointed out countless times, you can count on a regular basis for one or both of the worst performing sectors of the day, to come from NASDAQ. Today -just like yesterday- was no exception1 The message: stay away from NASDAQ, at least for now, if you are a risk averse investor.

8-28-01

Charts:  Yesterday we said:

"Today we had a minor "hesitation." That's normal after Friday's advance as long as, the market re-asserts its upward move. If the market deteriorates, it can snowball going into the end of the week. Many "decision makers" are on vacation, while "sell programs" are left to safeguard against any unpleasant development. If the market deteriorates, look for "sell programs" to kick in and make the situation worse." 

Today the markets did deteriorate! However, all Indexes close at or above support levels. Therefore we believe tomorrow's GDP report will be pivotal. If the markets break down thru their support levels, look for sell programs to make the situation worse.

SPDRs/Sectors: As we have pointed out countless times, you can count on a regular basis for one or both of the worst performing sectors of the day, to come from NASDAQ. Today was no exception1 The message: stay away from NASDAQ, at least for now, if you are a risk averse investor.

8-27-01

Charts:  Today we had a minor "hesitation." That's normal after Friday's advance as long as, the market re-asserts its upward move. If the market deteriorates, it can snowball going into the end of the week. Many "decision makers" are on vacation, while "sell programs" are left to safeguard against any unpleasant development. If the market deteriorates, look for "sell programs" to kick in and make the situation worse.

SPDRs/Sectors: The XLU continued to gain small ground, along with the Semiconductors. No "message" from the market today!

8-24-01

Charts:  Today we had another minor improvement. It seems that the markets are looking for an excuse to move higher going into the end of the month.

SPDRs/Sectors: Examining the SPDRs, two trends have emerged over the past two weeks a) the XAU has been a consistent winner, and b) you can count on some NASDAQ related sector to "bomb" on a daily basis! (even when things are seemingly calm, like today, notice the DOT)

8-23-01

Charts:  Yesterday we said: "

All the major indexes are resting precariously right at, or slightly below, their 50 day lower Bollinger Bands. By some measures such as the McClellan Oscillator, the markets have plenty of room to fall further. By other measures such as Stochastics, William's %, the markets are already pretty oversold and they should rebound shortly and probably strongly! What should "risk averse" investors do? The obvious, avoid risk, and stay in cash until the market stabilizes."

By today's action one may conclude that we are getting the "bounce" off the oversold condition. If you are a trader, you may choose to play the "bounce" However, if you are an investor, you should be looking for something a little more than just a  bounce. 

SPDRs/Sectors:  Notice the incoherent message coming out of the market today! The semiconductor sector was sharply higher due to optimism about a "bottom" On the other hand, the hardware sector -which buys the chips the semiconductor companies make- was one of the worst performers. One might ask "if the buyers of chips see no evidence of a bottom, why would they want to buy more chips?" It just tells you that the market is being dominated by traders with no long-term convictions, they just jump on whatever is moving, in whichever direction it is moving! Meaning the market is not stable, because it is subject to short-term contradictory gyrations. What sounds good today, is bad tomorrow, and it sounds good again two-three days later! It is a trader's market and if you are not one, you should stay in cash.

8-21-01

Charts:  All the major indexes are resting precariously right at, or slightly below, their 50 day lower Bollinger Bands. By some measures such as the McClellan Oscillator, the markets have plenty of room to fall further. By other measures such as Stochastics, William's %, the markets are already pretty oversold and they should rebound shortly and probably strongly! What should "risk averse" investors do? The obvious, avoid risk, and stay in cash until the market stabilizes.

SPDRs/Sectors:  True to its recent character , NASDAQ provided again, the day's worst performers. Those of you who follow us, you should recall that we spotted the trend early last week, and we warned that NASDAQ was not safe to put your money! We hope you can see the importance, and usefulness  of this part of our daily analysis in spotting short-term trends.

8-20-01

Charts:  The major Indexes rallied from where they have found support the past 8-10 weeks, the 50 day lower Bollinger Band. Unless the FED does something surprising tomorrow, the markets will probably follow their recent pattern of rallying towards the middle of their recent trading range.

SPDRs/Sectors:  Sticking to the theme from last week, we see money leaving a NASDAQ related sector (Networking Gear) and finding its way into defensive stocks such as hospitals.

8-16-01

Charts:  Yesterday we said:

Well, today the markets did not violate these key levels, so, we are still in a trading range. 

SPDRs/Sectors:  On Tuesday  we warned:  

Today, CIEN and BRCD did their best  to prove our point! Also, we had another NASDAQ related sector -Networking- having the honor to be among one of the two worst performing sectors of the day. 

8-15-01

Charts:  The SP500 and the DJIA had a minor change for to negative side, while NASDAQ's deterioration was more pronounced. Still there is hope! The key levels are the following: SP500: 1170, NASDAQ: 1900, DJIA:10250. Unless these levels are violated in a meaningful way, nothing has changed, we will still be in the same trading range we've been in for 8 weeks.

SPDRs/Sectors:  Yesterday we warned:  

Today, NASDAQ felt obliged to prove our point!  The two worst performing industries were the DOT and Internet, both NASDAQ related sectors. 

8-14-01

Charts:  The markets are doing the same dance they have done for the past 4 months. They came all the way down to the lower end of the range and now they are attempting to rally back up to the upper end of the range! In our view people should not even bother thinking about it! Enjoy the summer, you are not missing anything!

SPDRs/Sectors:  Gold was the only clear winner last week, and this week it started on the upside. We think it may have more to go if the mighty U.S. dollar can't recapture its might soon.

Charts:   The market's action over the past two trading days (Friday-Monday) is perfectly normal. After any advance the market pulls back due to exhaustion of "fuel" then it attempts to gather strength (replenish fuel) and embark on another leg up. If it can't replenish the previously spent fuel, if it can't muster new strength, then the rally dies off and the market rolls over. So, these two days, we have been  in the process during which the market pulls back and tries to find strength , will it find it, or won't it? Our indicators have turned mostly "neutral" meaning the chances are almost 50/50 that the market will either march higher, or, it will roll over.

SPDRs/Sectors:  Today's action did not really say much, people took some profits in the Networking sector -ahead of Cisco's earnings report- and nothing more.