|
Friday 9-29-00[before
the opening]
On Tuesday (see remarks
below) we said that our volatility model was
predicting a move in excess of 2% within 1-3 days. We
got that move yesterday, the question now is, whether
it is going to continue. AAPL lost $25 in after hours
trading, after issuing an earnings shortfall for the
3r quarter. We think investors will probably lose some
of yesterday's enthusiasm about tech stocks. On the
other hand utilities, financial and insurance stocks
should hold. PLEASE VISIT AGAIN SAT. 9-30-00 AFTER
12:00noon PST FOR OUR WEEKLY REPORT
Thur. 9-28-00[before the opening]
Between today and
Friday, portfolio managers will be doing their
quarterly portfolio dressing, trying to make
themselves look smart by having in their portfolios
the quarter's winners, and purging the losers from
their holdings. Consequently, utilities, insurance and
financial stocks have a chance to move higher, while
tech stocks have another chance to move lower. As we
have stated, previously, we believe a counter trend
rally (in NASDAQ stocks), could take place at this
point. However the evidence (which we will discuss in
detail in our weekly report) shows that it will
probably be a fake-out, with the real thing coming a
few weeks later.
Wed. 9-27-00[before the opening]
Although the trend is
down, the markets have sustained enough selling that
any day -without even a reason- could experience a
sharp advance, only to continue their slide again the
day after. It does not seem to us that we have hit
bottom, but we think we are awfully close to it
Tuesday 9-26-00[before the opening]
It appears that the
equity markets may try to test the second support
levels we mentioned in our previous commentaries
(DJIA:10500, SP500:1400, NASDAQ:3500) However, given
the oversold levels the markets are at already, a
sharp advance can't be ruled out either. Our
volatility model is forecasting a sharp increase in
volatility over the next 1-3 days, and it is
predicting a one day move in excess of 2%. We think if
the indexes did test the levels we mentioned, we then
should have a rally worth trading into.
Friday 9-22-00[before the opening]
Intel's warning cought
everybody -yesterday, after the closing, ourselves
included- by surprise. Until ten days ago, Intel had
maintained that everything was going to be o-kay with
3rd quarter earnings. Whether the market has a one day
sell-off, it begins a trip that will ultimately force
NASDAQ to re-test May's lows is anybody's guess. We
think tech stocks will find it rather hard to make
much progress until after they report earnings, so,
investors have a better picture before they commit new
funds
Thur. 9-21-00[before the opening]
We believe that the DJIA
and the SP500 are oversold enough to stage a counter
trend rally. The resilience of NASDAQ's highfliers (BRCD,EXTR,
JNPR, CIEN etc)is rather peculiar and warrants some
scrutiny. One must wonder if it is a sign of superb
relative strength, or, a sign that NASDAQ has not
bottomed yet. When the rest of the market tanks,
pilling on 20-30 "momentum" stocks, is not
usually a sign of health for the market in the
intermediate term. However, in the short-term we
believe NASDAQ could move higher.
Wed. 9-20-00[before the opening]
Yesterday, our market
timing model turned neutral, meaning at this point,
the markets can go either way. If the markets advance
on improving breadth and momentum, our model will turn
bullish. Our volatility model indicates an increase in
volatility before the market breaks on way or another.
We think caution is needed at this point.
Tuesday 9-19-00[before the opening]
All three indexes (DJIA,
SP500, NASDAQ) arrested their declines -yesterday- at
the first level of support. So, we could get a rally
from yesterday's lows. However, NASDAQ has a seconf
level of support between 3450 and 3500, the SP500 has
a second level of support at 1400, and the DJIA has a
second level of support at 10500. We would like to see
any rally starting from the second levels of support,
because they tend to be more reliable, and they have
lot's of upwards "thrust" due to the
compression that has taken place in the market. We do
think there is a very good chance for the NASDAQ
market to reach that second level, because several
"high fliers" are still very near the top of
their range. If stocks such
CIEN,BRCD,EXTR,JNPR,ARBA,PWER etc., declined in
earnest, they will take NASDAQ down to the 3450 level
in no time.
Friday 9-15-00[before the opening]
Yesterday's failed rally
in NASDAQ was not as bad as it seemed! As we've been
saying thru-out the week, the closer we get to Friday,
the more volatile the markets will get. If today
NASDAQ and the SP500 manage to rally, the advance will
hold into next week, possibly taking the NASDAQ back
to 4100 level (-/+50 points), and the SP500 back to
the 1520 level (-/+ 7 points) On the other hand, if
NASDAQ -and the SP500- decline today, and they violate
Wednesday's lows, then they will quickly test the
August lows.
Thur. 9-14-00[before the opening]
NASDAQ found support
yesterday at 3795, if it holds that means the Sep. 1st
top, was a short-term one, and NASDAQ will move
higher. The question then is "Is It Going To
Hold?" We're not really sure, mainly because of
the massive optimism among small investors. Today and
Friday, anything can happen due to triple witching on
Friday, so, we would not place any directional
significance on whatever happens these two days.
Wed. 9-13-00[before the opening]
If the top that NASDAQ
reached on 9-1-00, was a short-term one, then NASDAQ
will probably find support around 3775 (-/+25 points)
However, if it was an intermediate term top, then the
bottom will probably be between 3350 and 3450.
Tuesday 9-12-00[before the opening]
Due to triple witching
expiration on Friday, starting today, the volatility
of the market will increase notably. Given the sharp
declines of the past two trading days, it is highly
likely that today the market might try to rally. If it
continues to decline for the third consecutive day, it
will definitely stage a counter-trend rally tomorrow.
Friday 9-8-00[before the opening]
Yesterday (see below) we
predicted that "buy the dip believers" would
step in and move the market higher. After the closing,
TRW, ZOOX and SFAM warned that their 3rd quarter
earnings will fall short. Even H. Blodget (the M.
Lynch "analyst" who was recommending ETYS at
$90.00 as " a must" in everybody's internet
portfolio!- cautioned investors of more third quarter
warnings shortfalls. People are in denial, but when
3rd quarter earnings are finally out, we believe they
will be disappointing. NASDAQ "investors"
may elect to ignore the warnings and drive the market
even higher today and perhaps Monday.
Thur. 9-7-00[before the opening]
The decline in the SOX
index in July, was greeted by almost every brokerage
house on Wall Street, as unwaranted, because business
was booming. Now, the same brokerage houses can't
downgrade SOX stocks fast enough! In August Yahoo's
"awsome" results sparked a rally in net
stocks, despite evidence from every corner that the
demise of many Net stocks advertising with Yahoo,
would eventually affect the company's bottom line.
Yesterday, Yahoo's CEO Mr. Koogle confessed just that,
prompting Yahoo shares to plummet in after hours
trading! Something that we found really alarming in
August, was that the same "gurus" on CNBC
who were categorically predicting a tremendous rally
after Labor Day, were pretty much the same arogant
bunch predicting NASDAQ 6000 in March! Anyway, several
of the "popular" stocks -MXIM,NEWP,AMCC to
name a few- closed yesterday at their 20 day mavg.,
so, it is conceivable that the "buy the dip"
believers will step in today and do some buying,
lifting the market up, but don't the f arm on it!
Wed. 9-6-00[before the opening]
One day decline does not
automatically mean the demise of NASDAQ! However, it
should be noted that while high-tech stocks (with
earnings) were declining yesterday, internet and B2B
stocks (with no, or, very little earnings) were racing
ahead! Moreover, a close examination of the trades in
stocks such as FMKT, GOTO, CMRC, reveals very little
evidence of "block-trading" which is
indicative of institutional buying. Instead, most
trades were in small lots, indicative of small
investor buying. Are the small investors correct in
buying these stocks, at this point? We'll let the
market answer the question...
Friday 9-1-00[before the opening]
As of yesterday,
scenario #1 (see weekly updates) has pretty much been
materialized. We would like to point out, that the
recent volatility (although with positive bias) has a
lot to do with the rollover of futures contracts.
Consequently, it does not say much about
sustainability of the trend. Yesterday's sharp rally,
could just as easily be reversed today due to the
rollover.
|
AEGEANCAPITAL
GROUP INC.