CMG,
Thanks for the info. Here is a copy of the newsletter:
FINANCIAL INTELLIGENCE for November 17, 1999
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ECONOMIC & MARKET COMMENTARY
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The Day Ahead: More Volatility
Well the Fed did exactly what we thought they might do, surprising the market somewhat in the process, but ultimately doing
what had to be done. Now Mr Greenspan is off the hook. He has done what they had to do and it is not inconceivable that this
might be the last rate hike in quite some time. That is why the market reacted so dramatically after initially pulling back on the
news.
The violence of the moves exhibited immediately after the announcement was breathtaking and there was little one could do
but wait for things to settle down a bit. Once the move was digested the market greeted it with enthusiasm, but now we
confronted with the real impact of what the Fed intended: Higher interest rates. It looks as if long term rates will remain
above 6% for a while as we suggested and perhaps this might initiate the pullback that we expect will begin to unfold,
somewhere between here and about 3350 on the Nasdaq which as we already expressed was about the maximum upside we
expected might be seen on this upleg.
Bonds are going to be a problem for a while as they extend downward to test recent lows. How low they will go remains to be
seen, but they may put a damper on things for a while. Meanwhile the breadth improved markedly yesterday, contributing
to the quality of the rally and there is a chance that notwithstanding the Bonds, there may be sufficient momentum for the Dow
to really challenge or even surpass by some degree 11,000 once again. How much of a pullback may occur prior to this is hard
to determine, but there may still be enough power in this market for it to take a shot at doing that this week and there is an
outside chance of new all time record highs to be re-established in several of the leading indices in this dynamically bullish
market.
In conclusion, the market remains strong, but Bonds are a real threat and a correction could just as easily come out of nowhere
at any time. Be ready to take profits in an instant if things get ugly.
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The Long and Short of it
ALLP Alliance Pharmaceutical strengthening again. We are staying long. Consolidating.
CDE Long. This looks like a low risk Gold hedge, performance improving some here.
TBAE This stock is starting to look dynamically bullish and could take off at any time. Long.
TBAEW The warrants on TBAE are a very low cost entry into the underlying TBAE. Long.
WDC Western Digital Corp. We are long WDC at $3.20. Could be ready for liftoff soon.
MICA Long at $2.15. Strong action in Ingram Micro (IM) suggests liftoff may be close.
MSEL In at $1.25. It will take some challenge to reverse this one, but showing signs of life.
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Takeover Watch - based entirely on information in the public domain drawn from various media.
TARGET CO POTENTIAL ACQUIRERS
Chiron (CHIR) Running into resistance at $30. Novartis apparently interested to buy rest
Unocal (UCL) Finally a decent rally underway By one of the Oil Majors?
3 COM (COMS) Breakout into strong uptrend Siemens, Intel or other chipmakers
CompUSA (CPU) Acting better, could rally now Grupo Sanborns of Mexico taking stake
Cabletron Systems (CS) Still on a new breakout Cisco Systems, Lucent Tech
Merrill Lynch (MER) Up dramatically Friday Chase Manhattan, other majors
Trump Htl & Casino (DJT) May be close to bottom Shopping around for buyers, MIR, CIR?
MicroAge (MICA) Bottom looks to be in place Investment Banker to enhance Sh value
K-Mart (KM) Losing its appeal again short of upturn Rumours of acquisition by retail majors
Noble Drilling (NE) Strong rally finally underway Could be acquisition target of majors
IDT Corp (IDTC) Improving technicals, rallying Ripe for acquisition by a major
Net2phone (NTOP) Rally underway again Same applies to IDT. Low rate provider
Sprint (FON) May be topping out due problems Under Acquisition by MCI Worldcom.
Sprint PCS Grp (PCS) Same with PCS Now part of the Worldcom deal
CBS - May also be close to topping out here VIA - Viacom - now mirroring CBS
ADFC - Now mirroring CMGI in a sideways trend CMGI - Buyout for $500 M. Trading ops
VSIO - Will likely fluctuate with Microsoft for now Microsoft to buy this co for $1B plus.
UK - Union Carbide - Consolidating here Dow Chemical buyout - bottoming out?
CLFY - Clarify to be acquired by Nortel Networks NT's action now mirrored in CLFY
WLA - Warner Lambert - Bidding war AHP - American home products vs Pfizer
MTC - Monsanto Company Various suitors, possibly Novartis or Pfizer
HQ - Hambrecht & Quist Chase Manhattan Bank
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