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Friday 12-29-00[Before
the opening]
The SP500 has been up
for 5 consecutive days, and it is fast approaching its
upper resistance level at 1350-1355. NASDAQ has not
reached its 20 day EMA, or the upper resistance level
in the downtrending channel. So, it is likely that the
end of the year rally will continue into next week
(Tuesday or early Wed.) After thar we would expect a
pull back. We do not expect a break-thru the
resistance levels over the next two trading days.
However, if the pullback -next week- is modest, then
the markets could finally break out of the 4 month
declining trend. PLEASE VISIT SAT. 12-30-00 AFTER
5:00PM PST FOR OUR DETAILED WEEKLY REPORT
Thur. 12-28-00[Before the opening]
The last three trading
days have been positive. Yesterday's gains -although
small- marked the first time since Sept. 1st, that the
QQQ was up three consecutive days! Today if the
Consumer Confidence Index report shows a steep
decline, market participants will interpret it as one
more reason for the FED to lower rates earlier than
its Jan. 30th meeting, meaning investors may push the
market sharply higher. In the absence of any
significantly negative news today, the markets should
build on the previous gains. However, keep in mind
that we are still dealing with a bear market. Bear
markets do not need a reason to sell-off, so we would
not be surprised to see the market selling off -for no
apparent reason-
Friday 12-22-00[Before the opening]
We are seeing lot's of
institutional selling in large blocks (100,000+
shares) So far, the selling has been kind of orderly.
However, we fear that if for some odd reasons, many
institutions decide to hit the exit at the same time,
then we could have a dramatic one-two day decline.
Yesterday, was a disturbing day, if today (after 8
days of negative a/d and negative cumulative volume in
NASDAQ) we get more of the same, the selling could
intensify to extreme levels. We will wait to see how
the market opens, and then we will place some very
tight stops on the three long positions we have.
PLEASE VISIT AGAIN SAT. 12-23-00 after 5:00 PM FOR OUR
DETAILED WEEKLY REPORT
Thur. 12-21-00[Before the opening]
After seven consecutive
days of losses we expect the market to try to
stabilize. In fact we do not see more than 10%
downside risk from current levels. We also believe,
the current decline presents a good trading
opportunity
Wed. 12-20-00[Before the opening]
Yesterday's negative
reaction to the FED's positive action, is a reminder
of how bear markets behave! As we have said in our
newsletter, and also in our weekly updates, things may
be stormy until the end of the year, or, mid-January.
Nevertheless, this is the tail end of the bear market
for now. Starting in early or mid- January we should
see a noticeable improvement in investor's psychology
and market behavior. Today, if the market opens lower,
we would consider it a good candidate for a trading
buy.
Tuesday 12-19-00[Before the opening]
Many people are
expecting either a change to an easing bias, or, an
outright rate reduction from the FED. Therefore, if
the FED acts in its customary slow way of doing
things, and it just changes its bias to neutral, the
market may be disapointed and have another sell-off.
On the other hand, NASDAQ has sold off for 5
consecutive days -going into the FOMC meeting- meaning
a)even if the FED disappoints, the down risk from
another sell-off is at the most 8%-10%, b)if the FED
does not disappoint, then we could very well have a
"year end rally" Our opinion, is that people
are ahead of themselves expecting a rate cut, but Mr.
"G" may want to give people a Christmas
gift!
Friday 12-15-00[Before the opening]
Triple witching
expiration today, may bring some additional volatility
both on the upside and the downside. In addition, Mr.
Softy's (MSFT) warning last night probably won't help
things much. What happens today and Monday does not
matter a whole lot. What really is going to matter are
the following a) what the FED does on Tuesday, and b)
how the market reacts to the FED's action. So, let's
be patient and wait until Tuesday. PLEASE VISIT AGAIM
SATURDAY AFTER 5:00 PM PST FOR OUR DETAILED WEEKLY
MARKET UPDATE
Thur. 12-14-00[Before the opening]
In addition to the high
number of bulls, there is an even higher number of
investors who desperately need a rally in order to get
out of long positions that are deeply in the red.
Whether Mr. Market decides to play "crowd
pleaser" or, not, it has yet to be determined. We
continue to be agressively skeptical!
Wed. 12-13-00[Before the opening]
We maintain our belief
that for the time being, if NASDAQ continues higher,
it will find strong resistance at 3150. As we said
yesterday, we are troubled by the numerous "categoric
assertions, by both the public and the so called
"experts" that the course of least
resistance for the market is up. In all the years that
we have been students of the market, it has always
succeeded in making total fools of the majority! So,
please do not mind us for being a bit skeptical about
the near term direction of the market
Tuesday 12-12-00[Before the opening]
Every single
"expert" on CNBC has declared the past 4-5
days that NASDAQ has bottomed. Everybody (including
little kids in Guatemala!) are predicting a rally
after the U.S. Supreme Court finally puts an end to
the never-ending election, at the same time, 54.7% of
investment advisers and 47.1% of the members of AAII
are bullish on the market. Meanwhile, NASDAQ in the
past seven days has already rallied 500 points (20%)To
put it all together we think at the most the market
has 150 points left on the upside for the time being.
Friday 12-8-00[Before the opening]
Yesterday, the market
held relatively well. After the close INTC issued an
earnings warning, but the stock was treated very
kindly by investors. It could be a sign that selling
is drying up. We believe the market today can go
either way, with the unemployment report, the Florida
Supreme Court, and the District Courts' rulings
providing the fuel for both "irrational pessimism
or optimism!" PLEASE VISIT AGAIN SUNDAY 12-10-00
AFTER 6:00PM PST FOR THIS MONTH'S NEWSLETTER AND
DETAILED MARKET ANALYSIS
Thur. 12-7-00[Before the opening]
And now comes the real
test! Yesterday NASDAQ turned down right at its 20 day
EMA while the SP500 turned down right at its 50 day
EMA. Those were the two logical resistance points for
those two indexes -after the massive rallies they
experienced the previous day-3 out of 5 times, when a
stock, or, an index find resistance at a moving
average, they make another attempt to get thru. Thus,
the odds favor another run towards the EMAs. The test
is whether they manage to get thru the EMAs, and if
they do, whether they manage to stay above them. Our
model is still neutral. We closed our position on BHH
yesterday, for a 16% profit, as the "sell
stop" was executed at $25.00 (it traded as high
as 26.5)and we are again 100% in cash
Wed. 12-6-00[Before the opening]
Yesterday our model also
went neutral on NASDAQ. As we mentioned in our weekly
update (see "weekly updates") "... over
the next 2-6 weeks investor's perception will change
with regards to the fundamentals of the
market..." Yesterday's hint by the FED Chairman,
that the bias of the FED is about to change from
"tight" to "neutral" provided the
fuel for the advance. Whether it lasts for long or
not, it does not matter, just enjoy the ride while it
lasts!
Tuesday 12-5-00[Before the opening]
The market will probably
use any hint of a resolution of the election debacle,
as a reason to rally, at least temporarily. Our model
turned NEUTRAL (from bearish) on the SP500 and the
DOW, as of the close yesterday.
Friday 12-1-00[Before the opening]
Whether yesterday's
action was indicative of a bottom or not, it has yet
to proven!In our managed accounts we opened a 19%
position in BHH at 19, and we placed a "sell
stop" at 18.5. Today, the Supreme Court will be
reviewing Mr. Bush's petition. We suspect that not too
many traders would want to be either long or short
-over the weekend- while the High Court is reviewing
the case( we include ourselves in that group, in all
likelihood, we will close our long position today,
after locking in a small profit (BHH closed at 20.38).
Probably the market will have a positive opening, but
it could turn out to be a rather volatile day, with
the market trading on both sides of the fence. PLEASE
VISIT AGAIN SAT. AFTER 2:00pm PST, FOR OUR DETAILED
WEEKLY ANALYSIS.
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AEGEANCAPITAL
GROUP INC.