ZEEV’S NASSACRE PROGNOSIS UPDATE
Folks, the action these days is so fast and furious I’m not even going to attempt to summarize it all. Instead, I have collected what I consider to be the most important snippets of conversation between Zeev and other posters from among the several hundred posts on Zeev’s Turnips today, i.e., Wednesday, June 26, 2002.
Please note:
[1] The double lines of asterisks are breaks between different conversations, or pieces of conversation. That is, the stuff between any two sets of such lines are meant to be read consecutively.
[2] I have edited things a little bit here and there. I think this is to improve readability, but it might just be caused by my deep need to be controlling. I can’t say for sure.
[3] If you lose money because of what you read below, DON’T BLAME ME!
[4] If you make a ton of money because of what you read below, please send contributions to Zeev’s favorite charity, (address in the header of Zeev’s Turnips), and my own favorite charity, me. (Just kidding about the second part.)
[5] If you’d like to receive these updates by email, just join the Yahoo “Group” Zee Compost Heap groups.yahoo.com
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To:Zeev Hed who wrote (85736)
From: marginnayan
Wednesday, Jun 26, 2002 1:09 PM
View Replies (1) | Respond to of 86941
white in the MM's eyes
is equivalent to what in terms of market sentiments, volume,
TICK, P/C ratio, TRIN. Did i miss anything? A somewhat precise definition would help. Did we ever get "so called white in the MM's eyes" post Sept 11. In that case a comparison would help.
To:marginnayan who wrote (86436)
From: Zeev Hed
Wednesday, Jun 26, 2002 2:11 PM
View Replies (2) | Respond to of 86941
We got the "White..." four times times in the last 2 years, late May 2000, late December 2000 and Jan 2nd 2001, late March 2001 and late September 2001, the last one, I could see the retina, and told whoever wanted to listen, a bottom is in no later than the end of that (the 7/21 or so week if memory serves.)
Zeev
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To:Zeev Hed who wrote (86645)
From: Patrick Bateman
Wednesday, Jun 26, 2002 3:19 PM
View Replies (1) | Respond to of 86941
It looks less likely for those four or five GNT's by the 2nd of July
Do you still see tomorrow and Friday down? or are you starting to lean in the "no good bottom here" camp which makes tomorrow and Friday toss-ups?
To:Patrick Bateman who wrote (86671)
From: Zeev Hed
Wednesday, Jun 26, 2002 3:27 PM
View Replies (5) | Respond to of 86941
Yes, I am leaning to a bottom, but not a good bottom, more like February... That means the next bottom might be lower. Because of the "premature" turn, I got in PII before my target (core) at $67.10 here, and SKX at $20.90 also above my targets, but both under my last sales.
Zeev
To:Zeev Hed who wrote (86694)
From: Stockdoctor
Wednesday, Jun 26, 2002 3:29 PM
View Replies (1) | Respond to of 86941
Zeev...u mean we have bottomed and nassacre over??? Thnx
To:Stockdoctor who wrote (86697)
From: Zeev Hed
Wednesday, Jun 26, 2002 3:34 PM
View Replies (1) | Respond to of 86942
No, I still have the window open to the beginning of next week.
Zeev
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To:Zeev Hed who wrote (86694)
From: George S. Cole
Wednesday, Jun 26, 2002 3:33 PM
View Replies (1) | Respond to of 86941
So we will have to wait until fall for that string of GNTs, VIX 40+, and $400 gold.
To:George S. Cole who wrote (86709)
From: Zeev Hed
Wednesday, Jun 26, 2002 3:43 PM
View Replies (1) | Respond to of 86942
Who knows, maybe Crawford window of 7/7 to 7/14 will be it. I don't think so, and thus reduced cash to 54% (target was 50% by Friday, I am a little early..., but some core stocks seemed to be at good values again). Some of these entries, particularly BOBE (up $2.5...) are doing quite well. I hop some others got on that sausage train...
Zeev
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To:Zeev Hed who wrote (86694)
From: ajtj99
Wednesday, Jun 26, 2002 4:01 PM
View Replies (1) | Respond to of 86941
What about the new low the Dow made after the Fed release. That's a divergence that needs to be considered. The Dow was the only index, I believe, that did that. It has been a laggard, and possibly now is becoming a leader in the march down.
To:ajtj99 who wrote (86769)
From: Zeev Hed
Wednesday, Jun 26, 2002 4:15 PM
View Replies (1) | Respond to of 86943
Yes it could very well be, but the leadership down may occur only after another run of few hundred Dow points.
Zeev
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To:Zeev Hed who wrote (86805)
From: ajtj99
Wednesday, Jun 26, 2002 4:37 PM
View Replies (1) | Respond to of 86943
Zeev, the candles we got on the SPX and Dow are bearish candles (barely). They are the same candles we got when the COMP dropped from 1550-1495 10-days ago and recovered to fill the gap, but close lower.
To:ajtj99 who wrote (86826)
From: Zeev Hed
Wednesday, Jun 26, 2002 5:26 PM
View Replies (1) | Respond to of 86943
One of the many reasons that I still have the "window" open till next week. All year long, we had difficulty registering more than 250 new lows; at [the] extreme today we had 350, not the 450 plus I wanted to see, but when do I get everything I want to see? There are other indicators as well, but I would rather see the BPcomp moving sharply lower and of course a series of GNT. If I felt we had a bottom, I would be at 20% or under in cash. I am taking a shot that the fact that we held more or less, [means] tomorrow [we get] at least a G&C, (with help from international market ebullience). Then I'll probably unload the traders I went to sleep with and maybe few weaklings that need to be weeded out. If BOBE gets to the top of its recent range, I may dump it as well (g).
Zeev
To:Zeev Hed who wrote (86862)
From: ajtj99
Wednesday, Jun 26, 2002 5:44 PM
View Replies (2) | Respond to of 86943
Zeev, the VIX dropped in the PM, but the VXN did not confirm it. The same thing happened 10-days ago when we dropped from 1550-1495 on that Friday gap down. The Vix reversed off a spike, but it was never confirmed by the VXN.
The candle from that day is nearly the same as today on the SPX. The Naz narrowly got green. I am highly skeptical of any rally at this point. In fact, I believe it may be over with.
Just an observation. The volume is good, but not the 2.4 billion we normally see at bottoms. The candle is one we normally see on the 2nd day after a bottom is put in, not one at a bottom.
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To:augieboo who wrote (86736)
From: Zeev Hed
Wednesday, Jun 26, 2002 3:53 PM
View Replies (2) | Respond to of 86943
I moved to 54% cash, which means my bear suit is half unzipped. I still have the window open for a retest of today's low and maybe even lower till next Tuesday. I am often too early, I might be this time as well.
Zeev
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To:Zeev Hed who wrote (86746)
From: Eugene Kearney
Wednesday, Jun 26, 2002 3:59 PM
View Replies (1) | Respond to of 86943
I am sure I speak for many (bulls) that I am a disappointed that your turnips don't have a good bottom signal. I am not questioning your accuracy, please understand, but it sure seems to me that we got a vastly better bottom than February. I can't compare this to Feb at all. Vix, summation, bp, and 1 dozen other indicators all giving a better signal now.
The Feb rally was ~14%. Do you see more than that, or is it too early?
To:Eugene Kearney who wrote (86762)
From: Zeev Hed
Wednesday, Jun 26, 2002 4:12 PM
View Replies (7) | Respond to of 86943
If today's low of 1375 holds over the next week, my first target would be the 1595, still a nice 16% or so, if the developing rally (if we have one, this is all conditional on development during the end of this week and next) start and show good progression, we could go as high as the 1695 to 1710 major resistance, or close to 25%.
It is really to early right now, but there is a very good chance that by this time next week, I will finally throw away that stinky bear suit. (g).
Those that are short and have not taken shelter yet, it sure would have been wise to have done what I suggested yesterday, take a good chunk of the well earned profits off the table
Zeev
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To:Zeev Hed who wrote (86796)
From: Justa Werkenstiff
Wednesday, Jun 26, 2002 5:05 PM
View Replies (3) | Respond to of 86943
Boy, I must have missed all the GNTs to support this glorious forthcoming rally <g>.
To:Justa Werkenstiff who wrote (86851)
From: Zeev Hed
Wednesday, Jun 26, 2002 6:27 PM
View Replies (2) | Respond to of 86944
Justa, still too many "ifs" in that scenario. I have not seen the white in the MM's eyes, so I am not very comfortable with that, but neither did I see that white on the February low, and I jumped back on almost after a full third of the total rally was already under the belt. I am trying not to repeat the February mistake, but I am also keeping a close watch for the exit door. Thus I have donned my horns yet, just unzipped a little the bear suit.
Where do you think we go in the next four weeks?
Zeev
To:Zeev Hed who wrote (86890)
From: Justa Werkenstiff
Wednesday, Jun 26, 2002 7:44 PM
Respond to of 86944
February is history and it was a 14-15% rally. As the bear progresses, it makes lower highs as you can see since February as the downtrend line is quite apparent. The rallies have gotten weaker and weaker until they are now just bounces. We are at the bounce stage now and we are at or below the September lows. I can't think of one occasion in this bear market where we have touched the prior lows and launched higher on some magnificent run without breaching them. Why should this time be any different?
Re: "Where do you think we go in the next four weeks?"
I don't see this as like February. I think we are at the point where the down needs some good resolution before getting a sustainable rally. And that, I am afraid, means lower lows. I don't believe 1375 is it. People are afraid to a certain extent. But the action in the market suggests they are just as afraid if not more afraid of missing any rally. And the bears, it seems, are afraid of being eaten by any rally and thus a quick scan of SI shows most in cash it seems or even long. So maybe this is why we grind lower.
And have you noticed the QQQ max pain? Over the past few weeks it has dropped from $31 to $28 and $27 is now making a run. Yes, the September lows are becoming resistance. You need an increase in max pain, it would seem, to get the kind of rally you are looking for and it is not happening. Instead, you got the opposite. You need more disbelievers. And in order to get that you need more fear and lower lows, all consistent with the four year cycle path we have been following since January and the progression of this bear market.
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To:Justa Werkenstiff who wrote (86851)
From: ajtj99
Wednesday, Jun 26, 2002 5:10 PM
View Replies (2) | Respond to of 86944
If this was the real deal, we'll have a re-test no later than Monday that will get to within 2% of the low according to past patterns. If it isn't the real deal, we'll slice through to new lows. Either way, caution is advised for both long and short positions, with exit plans firmly in place in case the market goes away from your position.
To:ajtj99 who wrote (86853)
From: Justa Werkenstiff
Wednesday, Jun 26, 2002 5:23 PM
Respond to of 86944
AJ: If that was the real-deal, the volume did not show it.
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To:Zeev Hed who wrote (86890)
From: ajtj99
Wednesday, Jun 26, 2002 7:06 PM
View Replies (2) | Respond to of 86944
Zeev, looking back at the lows in Jan. 2001, April 2001, Sept. 2001, Feb. 2002, and May 2002, there have been a few things in common:
A re-test has happened in 3-4 days after the low was set.
The re-tests came within an average of 1.5% of the low (with the exception of April 2001, but the SOXX set a new low then).
The average rally lasted about 1.5 days. The re-test took over from there.
If that is the case, we have probably no more than half a day of gains tomorrow if we've not already had them all now.
The question is where this stops before the re-test begins.
The high tomorrow could stop at 1445 COMP, 1463, or even 1475 or so. I'm on the side of 1445 if we go higher, and maybe we'll get it in the first hour. If not, we could get a high around 1463 close to noon, IMO.
We rose 5.7% out of the Feb. low and then re-tested the lows. We already went up 4.5%. 1463 would be 6.5%, which could be the sweet spot.
Either way, you're probably not going to get slaughtered staying overnight in the Q.
To:ajtj99 who wrote (86902)
From: Zeev Hed
Wednesday, Jun 26, 2002 7:19 PM
View Replies (1) | Respond to of 86944
It seems you are agreeing with the G&C thesis. However, three [of the four] lows you describe had much better sentiment parameters working for them with multiple GNT's, the peak in new lows in Dec 201 was around 800 (many of these 800 are no longer with us, so I was not asking for that many) <g>, both the April and the September lows had much more than 450 new lows on the Naz, the VIX and VXN also were more extreme, and BPCOMPQ went under 30 in each of those instances as well. Yet, February gave a good rally, [despite the fact that] all these parameters were far from such extremes.
Zeev
To:Zeev Hed who wrote (86905)
From: ajtj99
Wednesday, Jun 26, 2002 7:55 PM
View Replies (1) | Respond to of 86944
Zeev, in February, we had a re-test that hit 1728, which was within 1.88% of the low then. In addition, we did hit 0 on a closing basis on Brooke's CI's when we hit the original low, which was missing today too. (They have been very good at nailing bottoms and tops).
[augienote: Brooke’s CI’s is a reference to the “Complacency Indexes” created/maintained by Brookelise Member 3357802 at Subject 51633 ]
In February I believe we also got that 45-degree angle decline on the VXN chart after the low was in, another indicator that it was a pretty legitimate low. Today's VXN chart looked just like it did that day we gapped to 1495.
This low is more extreme than the mild low in Feb, but less extreme than the lows in Jan., April, and Sept. 2001.
I mention these lows because if we did just have a low that would stick, the re-test paramaters would compare decently.
Furthermore, for a reversal with a higher close, you'd expect to see less carnage in the new highs and new lows. This shows the advance was mostly led by the large caps (MSFT), and as such could possibly be on wobbly ground. We'll see.
To:ajtj99 who wrote (86920)
From: Zeev Hed
Wednesday, Jun 26, 2002 8:09 PM
View Replies (4) | Respond to of 86944
ajtj, you know what, I'll take a repeat of the last time I stayed overnight in the Q (May 7th to the 8th...), the rally did not last long, but that one day was quite explosive and very "rewarding" for the overnight "team" (g).
To:Zeev Hed who wrote (86924)
From: ajtj99
Wednesday, Jun 26, 2002 8:20 PM
Respond to of 86944
Zeev, we're a bit further away from options expiration this time. Either way, I still believe we either breach the lows by Monday, or drop to within 1.5-2% of them on a re-test.
The Dow making a new low while the COMP and NDX made just re-traces of the gap gains this afternoon is also noteworthy. That is not supposed to happen if this is a low that will hold for several days or weeks.
Anyway, I know you'll make a killing on this run. If QLGC takes out 38, we should also take note and consider this more legitimate.
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To:Zeev Hed who wrote (86796)
From: Eugene Kearney
Wednesday, Jun 26, 2002 6:32 PM
View Replies (1) | Respond to of 86943
The indicators I follow suggest that 25% up from wherever the low is, is realistic and likely, but that close to a 40% pop like we had three times in the past 18 months can only happen if we head back down and get a much worse nas bp, slightly worse vxn and vix, and somewhat worse new high/low ratio. We wouldn't necessarily have to go much lower than today’s low, and in fact [a retest?] could be not as low and still satisfy these issues.
To:Eugene Kearney who wrote (86893)
From: Zeev Hed
Wednesday, Jun 26, 2002 7:14 PM
View Replies (2) | Respond to of 86944
I agree with you, and [but?] I think that 25% without a strong retest early next week is probably too much to expect.
Right now, I am still expecting to see lower lows, and frankly, it could very well be later then I was thinking like the window Crawford was talking about 7/7 to 7/14.
This intraday bounce, as ajtj suggested is really not very impressive.
Zeev
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To:Zeev Hed who wrote (86923)
From: SirRealist
Wednesday, Jun 26, 2002 8:40 PM
Respond to of 86944
Tech earnings don't roll in till the 10th:
biz.yahoo.com
and the really big names don't roll in till the 16th:
biz.yahoo.com
Thus a bottom by the 9th and a retest by the 15th make good sense, as well. To confirm this, I'd look for bad reports to cause rises.
Also, my nearest charting of near term gold highs is 7/5, 7/8 or 7/9, after a 5+ day pop, so it seems reasonable to look for 7/5-7/9 as the mkt low. But mosta the damage may be done by 7/3 since 7/5 may be a slow trading day.
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