Zeev, Mark Leibovit's comments tonight...
In case you missed NIGHTLY BUSINESS REPORT
4/12/02: Market Monitor -Mark Leibovit, Chief Market Strategist for Vrtrader.com
KANGAS: My guest market monitor this week is Mark Leibovit, Chief Market Strategist for Vrtrader.com. And welcome back to NIGHTLY BUSINESS REPORT, Mark.
MARK LEIBOVIT, CHIEF MARKET STRATEGIST, VRTRADER.COM: Hi, Paul. Glad to be here.
KANGAS: You know, it seems lately that every decent rally we've seen on Wall Street soon gives way to a sharp sell-off and then the process reverses itself. As a veteran technician, Mark, what is this market trying to tell us?
LEIBOVIT: Well, it's telling you that we've been in a bear market and we're still in a bear market, unfortunately. There have been a couple of exceptions where the Russell 2000, the Midcap 400 have acted better, but they still haven't broken into new until time highs. It's still a bear market. We experienced a bear market rally and technical indicators still have not confirmed in terms of traditional technical analysis that a new bull market has emerged.
KANGAS: Will we go back and test the 8,200 low in September?
LEIBOVIT: I believe there's a good chance not only will we test them, but we may even take out those lows. There's enough time ahead of us here that that could happen. In fact, as you know, just was it yesterday, we saw AT&T (T) and IBM (IBM) take out their September lows.
KANGAS: That's right. OK.
LEIBOVIT: So we already have two stocks that have done it.
KANGAS: Clear enough. You know, in recent years your annual Dow forecasts have attracted quite a following because of their accuracy. Now, let's look a look back at your model for last year. And as we can see on this graphic now, you predicted that the pattern -- the predicted pattern you had was fairly close to what the Dow did, at least up until the attack on America on September 11, which was unpredictable. But the market did come back, as your model predicted. Any comment here?
LEIBOVIT: Well, you know, we predicted a low in late August and obviously the terrorist attack was in September. But it's funny, technical analysis actually called for a decline during that period unbeknownst that an attack was coming. So technicals were negative regardless. I think we would have gone down anyway, maybe not as much.
KANGAS: Well, it was a good forecast. Now let's take a look at your Dow forecast for this year. And so far it looks a bit off the mark, pardon the pun. But guide us through this graphic.
LEIBOVIT: Well, you know, it's called the high so far. It said we're going to get a surge into the first week of March, which is exactly what happened. And it said from there watch out, we're coming down. We've been coming down since. And according to up to the mid year forecast, it says be careful into summer. Don't get aggressive here. I'm sure that the...
KANGAS: But this one only goes until the end of June. Why is that?
LEIBOVIT: Well, you know, we still have to do the work for the rest of the year. But a hint is that it still doesn't look so great, Paul. It's still not confirmed that a bear market is over.
KANGAS: OK, so you're still bearish up to this point?
LEIBOVIT: Correct.
KANGAS: You know, on your last visit with us on October 12, you recommended some stocks that did quite well. One of them was Newmont Mining (NEM). You liked the whole gold group and it's been one of the best performers. Do you still like the golds?
LEIBOVIT: Still love the golds. The first signals came last spring, last summer, and I think you're not even 50 percent on the way yet.
KANGAS: OK.
LEIBOVIT: So I would stick with them. Add to it on any weakness.
KANGAS: Any, other than Newmont that you're adding to now?
LEIBOVIT: Oh, absolutely. ASA (ASA), Gold Corps, G.G. (GG).
KANGAS: OK.
LEIBOVIT: Placer Dome (PDG). You just go down the list.
KANGAS: All right. You liked Scholastic (SCHL) at 46. It's now 10 points hire. Are you taking some money off the table there?
LEIBOVIT: Not only that, we went short today, Paul.
KANGAS: Uh-oh. OK. That's clear enough. And you liked AT&T (T) and it at $20. Now it's around $13.50.
LEIBOVIT: Well, we got stopped out of it but I'm not going to fight the downtrend there.
KANGAS: OK.
LEIBOVIT: Until that stock tells us it's turned, it's just like the new low it posted yesterday, watch out.
KANGAS: Well, being as bearish as you are, it doesn't sound like you have any stock buy recommendations here.
LEIBOVIT: Well, you know, the goal, some of the oil and oil service stocks.
KANGAS: Which ones?
LEIBOVIT: Oh, RIG, that's Transocean Offshore. The Energy Service (ESV), ESV, ESCO (ESE), Schlumberger (SLB), that whole group looks good. I haven't discounted those at all. Any of the energy stocks on a pullback here. I think crude oil is going through a little bit of a retracement. There's going to be another surge. So there's still places to make money. I have one special situation if you want.
KANGAS: Sure.
LEIBOVIT: A little stock called Stamps.com (STMP). It's under "accumulation." It's a $4 stock. I think that can go higher. But, you know, this is very selective. This is a speculation and for the most part you've got to be careful in a bear market.
KANGAS: Last October you liked the Nasdaq Qs (QQQ), the 100s. Do you still like them? Apparently not.
LEIBOVIT: No, since the March high you have to be careful. I think you're going to see new lows in the Nasdaq here, you know, very likely and I would be careful. Maybe if I saw the Cubes around $22 -- what are they now, about $33, $34?
KANGAS: Yes, they are.
LEIBOVIT: Then I would take a serious look at them down there, subject to volume confirmation.
KANGAS: So you're bearish enough to actually short some shocks?
LEIBOVIT: We're short, actually, I do some timing signals for a fund group out in Michigan and our signals are bearish and we're staying short until we feel the bear market has ended and we have confirmations.
KANGAS: OK.
LEIBOVIT: And one of the things that confirms that, Paul, is the -- all the positive economic news, supposedly, that we're hearing. That just tells you it hasn't come.
KANGAS: OK. I got you. You big bear you.
LEIBOVIT: Yes.
KANGAS: Thanks very much for being with us, Mark.
LEIBOVIT: Growing that beard in just for the bear market.
KANGAS: All right, Mark Leibovit, Chief Market Strategist for Vrtrader.com.
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