Charts:    The major indices continued to add to yesterday's gains, and the Thrust Oscillators appear to be indicating that the down thrust is coming to an exhaustion. However we do not have yet a  positive cross-over. Moreover we need to keep in mind the big picture. Take a look at the QQQ and the SPY, which are the proxies for the NDX and the SP500. Notice that both the intermediate and the short term trend is still down. Both proxies have not even challenged the short-term down trend yet. Thus, it is quite premature to be talking about any kind of "bottom" being in place. Yes the proxies and the indices have reached the bottom of their downtrending channel, but there is no evidence that a bottom which marks a trend  change, has taken place. For tomorrow's trading look for resistance at the 1002-1004 level for the SP500, at the 9525 level for the Dow, and at the 1500 level for NASDAQ.

6-26-02

Charts:    The major indices rallied off support, however, just like we saw on Monday, the rally was not confirmed by a turn around in the technical condition of the market. All indicators continue to decline, therefore, we can't put that much trust on today's reversal. We need to see follow thru, and we need to see an improvement in the technical indicators. For tomorrow pay very close attention to the following resistance levels; Dow: 9260, SP500:982 and NASDAQ: 1450. If the indices can't overcome these resistance levels, they will make fresh lows by Friday.

6-25-02

Charts:    Yesterday (6-24-02)  we said:

"Today the markets recovered sharply from the lows after making contact with support, to close with minor gains. However, the internals did not confirm the advance. In fact most indicators such as the McClellan Oscillators, the BSEs, and the Thrust Oscillators moved lower. In addition, the quantifiers hardly changed. Thus, it is questionable whether it will have a lasting power... We continue to believe that risk averse investors will be better served by staying in cash, rather than trying to pick the "bottom." Nothing suggests that the market has reached one."

Today's decline is the natural consequence of yesterday's rally that was not accompanied by any internal strength. With regards to tomorrow's action, we are inclined to believe that the markets will follow their usual pattern on FED meeting days, little movement until the FOMC meeting is over, and a big move after the meeting is concluded. No one is really expecting  a rate cut tomorrow, but Mr. Greenspan may try to help the markets by changing its neural bias, thus paving the way for a rate cut in August, if the market continues to head lower and consumer confidence continues to plunge. Regardless of what takes place tomorrow, the Thrust Oscillators -as well as the BSEs- suggest that the September lows will be violated before  the end of the week. 

6-19-02

Today (6-19-02) the markets took a turn seemingly for the worse after the bulls got slapped with devastating news, both from the earnings front and the geopolitical front.  All the targets -except the ones in the yellow - were met, and we believe the remaining ones will be met, too, but maybe not over the next few days. Logically, we should expect lower prices going into options expiration this Friday. Precisely because of that, and because of the Thrust Oscillators  still pointing up, we would not be surprised to see things unfolding the opposite way. We got high put/call ratios, high RYDEX ratios, and the boys at he options pits playing games, making very difficult to make a confident call over the next two days. Our suggestion to non-professional traders/investors is to stay out of the market over the next couple of days.   

SPDRs/Sectors:   Semis are leading the way down, ironically that was the sector most recommended by the moronic talking heads over the past two months at the channel of shame (CNBC) who says "analysts" have been "reformed?"

6-18-02

Charts:    Today's action was a no event, and insignificant. It could be one of consolidation, or, the rally may have already ended. The Thrust Oscillators suggest that the rally is not dead yet -they're still pointing up, and so do the BSEs- However, the trend indicators, and the quantifiers suggest that it won't go very far. The biggest problem for the bullish case at the moment, is actually the fundamentals. If you recall, "conventional thought' held that corporate profits -especially in techland- will recover in the second half. According to the pre-announcements by major companies such as Intel, AMD, Apple, is not happening. Even Oracle which managed to meet profit estimates, it did it by cutting over $400m in costs -not because the business environment improved- and it refused to give guidance going forward.  We expect to see some weakness -at least early in the day- tomorrow due to declines in Apple and AMD in after hours trading. As we pointed out on page 1, we must keep an eye on the following levels for tomorrows trading:

6-13-02

Charts:    Yesterday (6-12) we said:  "Today -Wednesday- by mid-day we got the reversal we had expected, and now we should have a rally that will last into Friday, and it should take the SP500 near the 1050 level, and NASDAQ near the 1550-1560 level.  However, keep in mind that the markets are in downtrends, thus, "bounces" can't be trusted."

Today -Thursday- our point that "the markets are in downtrends, and thus bounces can't be trusted, was again amply illustrated as the markets failed again to follow thru on yesterday's advance.  Today marked the fifth time, this month, that the markets have failed to follow thru on a rally. Maybe we will have yet another reversal tomorrow, although we doubt it. We see no reason why anyone would want to go home for the weekend, being long the market. In addition,   after the close, Genesis Microchip announced dramatically lower revenues.  Trading was halted with the stock down about 3 points, and it probably impact the tech sector  tomorrow. If the decline continues tomorrow, we are looking for support at the 1450 level for NASDAQ, and at the 975 level for the SP500. Moreover, the ECB indicated that it will soon be raising rates, in order to combat rising inflation in Europe. Higher interest rates in Europe, further help the Euro and hurt the dollar.  We are concerned with the fact that our indicators are breaking down below support, it maybe an early indication that the markets will go into a free fall. 

6-12-02

Charts:    Yesterday (6-11) we said: "Today, the rally did indeed die as we had expected, and now we should see another bounce near the low end of their downtrending channels (see charts on page 1) In that case we will probably see a lower opening, and a reversal by mid-day, leading to a bounce that should last for another couple of days."

Today -Wednesday- by mid-day we got the reversal we had expected, and now we should have a rally that will last into Friday, and it should take the SP500 near the 1050 level, and NASDAQ near the 1550-1560 level.  However, keep in mind that the markets are in downtrends, thus, "bounces" can't be trusted.

6-11-02

Charts:    Yesterday (6-10) we said: "However, nothing suggests that the indices will be able to overcome resistance at those levels. In fact, most of the evidence suggests that the rally can die as early as tomorrow, or, Wednesday. In that case we would expect the SP500 to fall to the 975 level, the Dow to the 9250, and NASDAQ  to the 1320 level. Stay in cash."

Today, Tuesday, the rally did indeed die as we had expected, and now we should see another bounce near the low end of their downtrending channels (see charts on page 1) In that case we will probably see a lower opening, and a reversal by mid-day, leading to a bounce that should last for another couple of days.

SPDRs/Sectors:  Yesterday  (6-10)we said:  "Gold stocks have declined dramatically over the past few trading days, we are looking for a bounce here."

6-10-02

Charts:    The charts and the indicators point to a bit more of a rally, perhaps to the 1050 level for the SP, 9850 for the Dow, and  1575 for NASDAQ. However, nothing suggests that the indices will be able to overcome resistance at those levels. In fact, most of the evidence suggests that the rally can die as early as tomorrow, or, Wednesday. In that case we would expect the SP500 to fall to the 975 level, the Dow to the 9250, and NASDAQ  to the 1320 level. Stay in cash.

SPDRs/Sectors:  Gold stocks have declined dramatically over the past few trading days, we are looking for a bounce here.

6-5-02

Charts:   

 Yesterday we said:  

" Today -Wednesday- the indices continued to rally off yesterday's lows as we had suspected. However, NOTHING has changed from a technical point of view.  Unless the indices break above the resistance levels we mentioned yesterday. We continue to believe that intermediate term investors should be in cash, or, in hedged positions, and short-term traders are better off waiting for the rally to stall and go short, rather than trying to play the long side. Given the sudden escalation in the Israeli-Palestinian conflict, and the continuous stand off between India and Pakistan, the odds favor an abrupt end to this minor rally. "

Today- Thursday- the market declined right from the start and never looked back. Although, it is approaching oversold levels, we got to wait and see whether the market can actually muster a rally, if it can't it will go into a free fall. For tomorrow's trading  we need to pay attention to the 1015-1020  level for the SP500, and the 1500-1520 level for NASDAQ.  Given the negative news from Intel, after the close, we would expect follow thru on the downside in the morning, and if the market is to stabilize, we should see a turn-around by mid-day from the support levels we mentioned. If it does not happen, then  things can get rather ugly. 

SPDRs/Sectors:  Today gold stocks were the only issues to advance, and after the close technology issues plummeted. The action in hospital stocks the past few days successfully telegraphed that techland was going to get hit again.  The really worrisome part, is the fact that similar action has been seen -as we pointed out yesterday, see comments below- at the start of major declines, not, at the end. Therefore, we must -at least- consider that maybe the market has started another leg down. 

(From yesterday: Notice that today, is the third time since the middle of last week that   investors  moved into "defensive issues" such as hospitals. If you recall we saw the same action on 1-10-02, 1-14-02 and 1-16-02 (see archives) At the time we made the following remarks :

"1-10-02
SPDRs/Sectors: Today we saw investors moving into defensive issues such as Healthcare and Reits. One day though does not make a trend.

1-14-02
SPDRs/Sectors: Today -just like last Thursday- we saw investors moving into defensive issues such as Healthcare and Reits. Keep in mind that we have seen the exact same behavior by investors prior to all tops in tech the past two years. 

1-16-02
SPDRs/Sectors: Defensive sectors such as Gold and Hospitals continued to rise. We have pointed out that in the last 24 months, every major decline in tech has been preceded by positive action in defensive issues."

As you remember, January marked an intermediate term top for the Dow, the SP500 and most importantly NASDAQ. Thus, we should pay attention to this development, and the potential message that once again it may be sending.)

6-4-02

Today we saw a trin  reading over 2.0 in the NYSE, which 9 out of 10 times brings -at least- at one to two day rally. In addition, the 10 day Summation Index for NASDAQ was down to the level from where  we usually get -at least- a one to two day rally also. Therefore, a continuation tomorrow, of todays' bounce can't be ruled out. Whether it develops into something bigger, is highly questionable given the poor overall technical condition of the markets. For the next couple of days the areas to keep an eye on are the following; NASDAQ:1620-1625,   SP500:1060-1065.   We expect any rally to stall at these levels, if indeed it does, that will be a re-entry point for those who wish to go short, or, an exit point for those who wish to take a chance on the long side. On the other hand, if the decline resumes tomorrow, we are still looking for support in the 1015-1020 for the SP500, and in the 1500-1520 area for NASDAQ.

SPDRs/Sectors:  It really gives us lot's of confidence in the market to see the internet sector leading today's rally...

6-3-02

Charts:   Today's deterioration should not come as a surprise to any of our subscribers. We pointed out the poor technical condition of the markets when we went on a "SELL" signal last week, and we elaborated even further in the EXTRA edition of the weekly report. The real question is whether the markets are embarking on a new leg down, or, we are seeing the tail end of the decline that started back in March for the Dow and the SP500, and in January for NASDAQ. We believe that we are seeing the tail end of that decline, but it may take another 1-3 weeks before it comes to its conclusion. For now we believe that if today's levels do not hold tomorrow, then we should see support for NASDAQ around the 1500-1520 zone, and around the 1015-1020 level for the SP500. 

SPDRs/Sectors:  Gold stocks were again the star performers today, and if it take out last week's highs, the XAU should end up at the 92-95 level.