7-23-01

Charts: In our weekly commentary we said "However, you should keep in mind that -in our view- we are still in a bear market, and things can take a turn for the worse at any time, for no particular reason, and without warning!" Today, was such a day, in which things took a turn for the worse without any warning. Over the past 7-8 trading days, we have witnessed a battle of wills between the bears and the bulls that resulted in the popular averages going nowhere during that time. Everything must come to an end, so, today's action might be viewed as a turning point (for the worse) if there is follow thru tomorrow. If there is not any, we are back to square one.

SPDRs/Sectors:The action in the SPDRs and individual sectors, is testimony to investors' lack of conviction. Today's "hot sector" is tomorrow's "turkey" and vice versa. We continue to believe, that given the current environment of no clear ledership, the market risk is above average, while the return is below average, thus with the exception of some special situations, cash is still king!

7-24-01

Charts: The markets continued to deteriorate today. However, all three major Indexes, DJIA, SP500 and NASDAQ, found support at the convergence point between the 20 and 50 day lower Bollinger Bands. We would hold back from getting utterly negative until these support levels were penetrated convincingly.

SPDRs/Sectors:Notice, how for the second day in a row the "best performing" SPDRs/Sectors were actually losers (with the exception of Gold today) What qualified them to be "best peforming" was the fact that on a relative basis they declined less than the rest of the market. The message here should that we might be entering a period of wholesale liquidation, during which nothing is safe! We continue to believe, that given the current environment of no clear leadership, the market risk is above average, while the return is below average, thus with the exception of some special situations, cash is still king!

7-25-01

Charts: The markets rebounded from levels that we had expected to represent strong support areas. This is normal, you would expect this to happen, even if the market penetrates them later. At this point, one must acknowledge that the market managed to snatch victory out of the jaws of defeat. Whether it can continue or not, that can't be answered with certainty yet.

SPDRs/Sectors:Notice, that technology related issues underperformed the market both when the market declined, and when the market advanced! Today's strength came from Natural Gas and Oil related stocks that have been decimated the previous days. In other words, what we saw today, could have very well be just a reflex rally, within a downtrend. Risk averse investors should wait until the market proves itself to be in a rally mode.

7-26-01

Charts: The markets appear to have snatch victory out of the jaws of defeat! They improved today and if the improvement accelerates, then the "summer rally" may finally be upon us.

SPDRs/Sectors:Notice, that the areas that were hit during the first part of the week, are the ones with the best performance. The implication is that we may be seeing just a "reflex" rally from oversold levels and nothing more. That's why risk averse investors should exercise a bit of caution until the Indexes get above their 20 day EMAs.