Stock Attack II - A Complete Analysis Message Board

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Strategies & Market Trends : Stock Attack II - A Complete Analysis

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To: StockOperator who wrote (35821)	6/11/2002 6:33:19 PM
From: StockOperator	Read Replies (2) of 52237

It's been a little bit better than a month from my last post and I figured now would be a good time to throw my two cents into the mix. I have the luxury of a free moment in between naps (new baby in the house) and would like to outline where I believe I see things going. For anyone that does not remember I have posted some bearish comments on the markets over the past couple of months, those comments based totally off of the longterm structure of the charts. And of course it's obvious now that those thoughts have played out with the destruction in prices over the many weeks. The big question now is where do we go from here? Although I have not had the time to post (which really hasn't been necessary with prices falling week after week) I have kept up with the solid analysis from many of the threads on SI -Zeev's "nassacre", JT's "mother of all short covering", and so on.... All very persuasive but yet all different in there roadmap to where we're going from here. All the more reason to pipe up here, if anything, just to add confusion into the mix. Months ago I made comments here that stocks would be under pressure all year long. I said that there was going very few places to hide with the selling pressure hitting most groups to include tech, bio, and even utilities. I also made many individual stock calls (based off the technicals) to back up my arguments. I repeat all of this as my way of laying a foundation for where we were to where I believe we go from here. Months ago the prevailing thoughts by most of the street was that the economy was getting better and that it was crucial for the individual investor to buy stocks now in anticipation of a better second half. The market even threw in a huge two week rally at the beginning of March as a way of adding weight to that argument. Of course we all know now that that was a sucker rally to pull in the little guy besides convincing a whole host of technical and fundamental "professionals" as well. Many of them dropped liked flies buying into the frenzy of that two week move. Now that we've seen such a destruction in prices over the last couple of weeks the new mantra is all about focusing the masses on a possible retest of those Sept. lows. "A retest of those lows is POSITIVE for the market!" is what they want the public to believe. Almost as if the next requirement is a retest and then we are off to the races in a new bull market. Unfortunately, that's how W.S. works its magic. Like a beautiful slight of hand trick it keeps the masses focused on what it wants while not focusing on things like the whole host of stocks that have already blown through those old lows. The implications of which nobody seems to be talking about. Why should anyone have confidence in the major avgs being able to hold those lows when so many individual stocks have already failed to do so??? Look at Cien trading at four and change. Months ago when it hit nine and broke some key technical support for that time frame I said that "its price would seek out the old lows (historical) of four like a magnet and here we are today. Every day the damage gets more extensive as it pulls in stock by stock and sector by sector. And I am here to say that the damage is not over yet. Perhaps even far from over. There are a whole bunch of stocks like CSCO and KEI that have not yet tumbled (similar to RFMD last week) after breaking key support. DIS which I harped on quite a bit a few weeks ago has only just begun its break down. Back then the smart money was distributing in the mid twenties while at the same time CNBC touted one analyst after another with their strong opinions of the stock. Look at the monthly - just beginning to break. Look at the feeble attempt in NOK today. Another stock with a date in destiny with even lower prices. Stocks like SUNW and ORCL with their feeble rallies on mornings like today (DOW up 100) should tell you that the pressure continues to beat down on these stocks. So yes I believe lower prices are definitely in store for the generals to include the major avgs. The sectors that were oh so good to the lucky investors who cashed in during the late nineties will continue to punish those still in or perhaps investors looking at those stocks to regain their glory by betting new money. As a matter of fact stocks like CIEN with it's TOTAL retrace of that historic bull run ($4.00-150.00 not to consider splits) over the last couple of years could be a giant clue as to what the market has in store for many of those high fliers. How bad can it get? Just start looking at those long term charts to see that we could easily lose another 50% in the compx alone. Let me finish off by saying that a good first clue for the DOW would be a close at the end of this month south of 9529. We broke through that level today and should continue south the rest of the week. With two plus weeks left the market will back and fill as it pleases but it's that end of month close that will be another clue to the DOW's fate. RE the rest of the market, there is enough proof (like SUNW) that many stocks continue to be under the pressure of the bear despite the garbage that WS spills out to the contrary. Profitable trading. SO

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