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Friday 7-28-00[before
the opening]
Today's GDP report may
give -a much oversold market- either the needed excuse
to stage a "reflex" rally, or, a reason to
get even more oversold! Even if the market sinks
further today, the end of this downdraft is at the
most one-two days away.
Thur. 7-27-00[before the opening]
Last Friday (see daily
updates) we remarked that although the Dow had rallied
170 points, 15 of the components were down for the
day, and 13 up, implying, that the price action masked
the internal weakness of the Dow. Yesterday that
weakness finally caught up, it always happens! Now
here's another observation: yesterday at 8:30am PST
Nasdaq was at 3895, and the declining issues stood at
2613, at 11:44am PST, Nasdaq was at 4000 (it had
rallied 105 points from its low) and declining issues
stood at 2532, in other words, just 81 issues out of a
universe of approximately 4600 -that trade on Nasdaq-
were responsible for that 105 point advance. 81 issues
represent just 1.76% of total traded issues. Without
further comment, we will let you decide how healthy
and stable Nasdaq really is, at this time, when a 100
point advance is supported by only 1.76% of the stocks
comprising the index.
Wed. 7-26-00[before the opening]
The market's refusal to
follow thru either on the upside, or, the downside, is
indicative of the lack of conviction on behalf of
market participants. The economic reports that will be
released between today and Friday will probably add
more to the confusion. Any rally that starts from the
current levels will not last very long, unless the
SP500 tests the 1400 level, and Nasdaq tests the
3650-3750 level, do not expect any sustainable advance
Tuesday 7-25-00[before the opening]
The market is
approaching short-term oversold levels, so, a
two-to-three day rally could start at any moment, and
it will be led by the semiconductor stocks that have
sold off considerably the past week. However, keep
this in mind, as of 7-21-00 all four major Sentiment
indexes (Investor's Intelligence, Consensus Index,
AAII index, and Market Vane) posted readings as high
as the ones they posted in mid-March. With such
exuberant optimism prevailing among investors, we find
hard to believe that any sustainable, substantial
rally can begin from here
Monday 7-24-00[before the opening]
Usually, but not always,
the market reverses course after options expiration
day. Thus, we would not be surprised to see the market
making another attempt to rally, today and perhaps
Tuesday. However, we do not any fuel to sustain it.
Friday 7-21-00[before the opening]
Yesterday's price action
would have been very positive if it had been supported
by the technicals. The Dow was up 170 points, but
there were 15 components down, and only 13 up! Nasdaq
was up 130 points with 2209 advancing issues and 1772
declining ones. These are not the signs of healthy
sustainable advances. Of course, all that could change
today, if that is the case we will turn positive, but
with such poor technicals -not to mention the plethora
of non-confirming mommentum indicators- we remain
skeptical at best.
Thur. 7-20-00[before the opening]
Today, Mr. Grenspan is
testifying in Congress, while SUNW, AOL, BVSN, and
several other widely followed companies are releasing
earnings. That is a fine recipe for volatility!
Wed. 7-19-00[before the opening]
The market is in a
"topping" process. As we mentioned in July's
newsletter, we expect more downside behavior in the
next few days. Some of the stocks that our system has
"red flagged" as potentially vulnerable at
this point are the
following:BRCD,BRCM,SANM,AAPL,AMCC,APH,BSTE
Tuesday 7-18-00[before the opening]
In addition to the CPI
report that is being released today, several key blue
chips will be reporting earnings (AAPL,CY,INTC,HON,MSFT,VRTS
to name a few) Therefore, we have a recipe for a
potentially volatile day.
Friday 7-14-00[before the opening]
The markets -yesterday-
continued to behave -for the fourth consecutive day-
the way our short-term forecasting model had
predicted(see weekly updates) That leads us to believe
that unless the PPI report -due to be released today-
spooks investors, they will continue to bid prices
higher.
Thur. 7-13-00[before the opening]
The markets have behaved
the first three days of the week exactly the way our
forecasting model had predicted (see weekly updates)
Our empirical observation has shown that if the
prediction is proven correct -for the first three
days- the likelihood that it will be proven correct in
its entirety, increases dramatically. Consequently,
the odds favor further upside behavior -especially in
Nasdaq- We think the Dow and the SP500 are getting
tired.
Wed. 7-12-00[before the opening]
Our forecasting model
(see weekly updates) had predicted a "down"
day for Monday, an "up" day for Tuesday, and
then either a break-out or a break-down on Wed. Nasdaq
is acting as if it wants to break down, while the
SP500 and the Dow act as if they want to break out.
Either "break" today will set the tone for
the near term and it will cause our model to turn
bullish or bearish
Tuesday 7-11-00[before the opening]
Our forecasting model
(see weekly market updates) had forecasted a down day
for Monday for both Nasdaq and the SP500, thus
yesterday's retreat did not surprise us. Further
inability to build on the gains of last week will
eventually lead to a sell-off. At the time being,
neither the bulls, nor, the bears have the upper hand,
we continue to be cautiously optimistic on the market,
unless further deterioration takes place, today, but
more importantly tomorrow
Friday 7-7-00[before the opening]
Today, the much awaited
unemployment report will be released, and its contents
will set the tone for the market for the next 2-3
weeks. Our own research indicates that the report may
be unfriendly, but we could be wrong.
Thur. 7-6-00[before the opening]
Yesterday we warned (see
daily updates) that corporate earnings may give
investors little to be exuberant about! We find
troubling that the charts of many semiconductor stocks
appear to be huge double tops. However, in this
business, appearances can be misleading. We still
think that if Nasdaq fell to the 3500-3550 area,
short-trm traders should step in and establish long
positions
Wed. 7-5-00[before the opening]
The end of the quarter
"window dressing" is over, market
participants will begin to concentrate on corporate
earnings and the upcoming unemployment report -for
clues on the future direction of interest rates. We
think investors may find few reasons to be exuberant
about.
Wed. 6-28-00[before the opening]
It seems to us, that
there is universal agreement among "gurus",
"analysts" and "pundits" that
whatever the FED does, it is already priced into the
market, and thus, it should rally to he moon! We have
no opinion about how the market will react today,
we'll wait and see.
Tuesday 6-27-00[before the opening]
We are certain that the
markets are consolidating in order to move higher.
What we are not certain of, is whether the markets
will start another leg up, from here or from a lower
level. We believe, if the markets rallied from the
currents levels(especially Nasdaq), the upside will be
somewhat limited. It might be time to take another
look at some Dow stocks such as GE, C, and JPM
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AEGEANCAPITAL
GROUP INC.