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Strategies & Market Trends : Technical analysis for shorts & longs

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To: Johnny Canuck who wrote (40409)	12/3/2003 10:20:22 AM
From: Logain Ablar	Read Replies (1) of 69810

Hi Harry: On cmgi they release earnings next week and it seems to me the risk / reward still favors not holding a stock going into earnings announcements. Regarding valuations Fleck is right on valuations out of wack (too high) BUT remember: 1) The valuation metric is on trailing 4 quarters. 2) Market is looking at future 4 quarters (so how long does the economy do well for earnings to continue to grow). 3) Valuations don't matter until they do matter. IMO the economy should be fine next year which will bode well for the earnings forecasts. 4) Fed fiscal policy is acomodative. 5) Tax policy is stimulative. 6) Deficits are stimulative (wait till we pay the piper on this when inflation kicks in and short term investments need to be rolled over). 7) The US $$ is finally down to a range where US manufacturers can compete again (a by product of our trade deficits which everyone blames China (they are one piece) but lets not forget oil imports - remember the US didn't start having trade deficits until the 1st oil embargo) 8) Oil may back down towards $25 during the year (like an additional tax cut but I don't expect this before April) I'm just wondering when the economy will start to sputter. Clearly not before the 4th qtr of next year. The major concerns will be: 9) Inflation and increased interest rates. 10) Mideast Oil related price spike. 11) Set back in war on terrorism; (one must worry about IRAN and Afganastan turmoil this winter - maybe a reason to cool the markets off in the March / April time frame BUT any percieved victorys, Bin Laden and Sadamn takedowns can be positives). Time frame wise I feel the market will be accodomative thru April and possibly thru year end past the elections. Right now Zeev has a pull back with a strong end of December / January.

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