bigcharts.marketwatch.com
January & May are the shoulders...
I am calling for no rallies longer than 2 days consecutive for several weeks. When you see the Dow gap down ONCE, and test 8000, get out out out of all longs. ALL! (except gold) I suspect this will occur by Thursday.
To me, with or without a terrorist attack, I see the DOW going to 6300 quickly, and 5000 or lower by early August, and the worst of it may come swiftly, with the next two weeks at red alert risk.
NASDAQ will go to 1000.
Another head & shoulders:
stockcharts.com[g,a]maclnnay[d19900101,20020604][p][J4522095,Y]&pref=G
SPX to 775
Obviously, DJIA is facing the worst of it, as NASDy has already corrected a ton for the past 27 months.
Certain aberrations have been occurring lately that bear no resemblance to anything I've seen before: why are AKLM and MIMS trading at such mild PEs? Because 15 will not be the standard during an overcorrection period.
Homebuilders and autos have peaked on cheap credit and have peaked or will peak within 3 days. I believe the cheap credit borrowed sales from the future, so they are not likely to bounce back any for at least a year.
Break of 1423.... means $1000?
technologyinvestor.com
Very interesting short calls here. As I noted previously, only the USIA offer is holding EXPE up.
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VTO shows all indexes oversold:
vtoreport.com
This suggests the markets may attempt a rally Monday-Tuesday. If this happens, enjoy it; it will not be this good for a long time.
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More aberrations?
Do the big guys sense it?
Gates' sales of MSFT shares in recent years:
23.95m 1999
20.61m 2000
19.450m in first half of 2001
29.973m since 7/31/01 and on June 10th and 11th, he filed Form 144s to sell another 10m... so his sell rate has nearly doubled in the past year.
Paul Allen was selling at an accelerated pace but his last recorded sale was 2/17/2001..... for these two men, the forms don't disclose how many remaining shares in MSFT they retain. But Paul Allen went on a yearlong selling spree in USAI, reducing his holdings from nearly 10% to 0 on 5/13/02. Just 24 days later, USAI offerred to buy the remaining shares of ROOM EXPE and TMCS... with no fixed dates. USAI's Chairman of the Board, Barry Diller, seems to be the remaining largest shareholder with just 2.2m shares.
And in the overbloated EXPE, the two largest shareholders seem to be Director Thomas Breitling, who holds 50,000 shares.... and CEO Richard Barton, who has less than 29,000 shares... and filed a 144 on 6/11 to sell 20,000 of those! The lack of shares held by insiders is breathtaking. And no institutions own EXPE... there are 21.1m shares available with 4.1 (22%) short. The stock exchange offer made by USAI was for EXPE at $76.86. And with a tight H&S and a weakening price, this $67 stock seems headed to test support points at $57-60, at $48 and will likely see $42 within a fairly short time frame.
These are just a few signs. And they don't, by themselves, send clear signals of such a dramatic drop in the DJIA as I've described. But at 9,254, the Dow only has support at 8900-9000 and soft support at 8400-8500 before it goes to retest last Sept's 7,926.93. Then only 7400 and 6971 offer support before my target of 6300.
Watch it. The day it gaps and seems headed to 8000 is when to sell longs and buy gold to ride the squeeze train.
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Why am I convinced?
I went through the DJIA stocks: cftech.com
18 of 30 are very close -within $6 - of 52 wk bottoms. Exceptions are AXP BA KO DD GM HON IP JPM MMM MO PG UTX, though MO & UTX are clearly cracking. Only KO HON IP PG MMM are showing no clear signs of weakness.
8 are in clear trouble: GE is hitting new lows now,as is INTC, IBM, SBC, T ... and MRK will Monday, JNJ & DIS will test Monday.
It is these weaknesses plus the dollar, plus the gold squeeze on the central banks, plus the billionaires selling hard, plus some stocks at cheap valuations yet dropping, plus the US trade deficit, plus the financial squeeze on the federal and state governments, plus the unemployment rate plus the weakening consumer spending plus we're hitting our debt ceiling plus Japan/Argentina/Uruguay.... in short, we're only one major bad news story from a final catalyst and it all points to the Tues/Wed FOMC mtg.
Despite this:
www2.marketwatch.com{E6236ED2-0358-463D-AC7E-FCFB6AE888CB}&symb=BAC&sid=147233&siteid=bigcharts&dist=bigcharts
Just remember, watch the DJIA for the clear signal of a gap & drop. The severe action of the DOW Friday relative to the mild downturn of NASDy was a further disturbing indication.
I'll prolly be offline Mon/Tu, and I hope y'all are ready for the ride down.
-kevin |
