A Good Sunday to you, Malcolm et all,
Someone brought to my attention, the fact that I had not specifically mentioned FNTN in my post #2105 of last Thursday June 4 at 12:26 pm.
My apologies for this oversight, but I thought it would be apparent to most, that as a matter of course, I would be alluding to FNTN's technical picture first, in my opening statement as I usually do, which reads as follows:
"Just thought you might like to know that I really like the unfolding technical picture a great deal right here."
I then went on to point out and state that: "'Additionally', imho, the 'overall market' could be nearing the end of its correction."
"The Nasdaq is outperforming quite strongly today, so I am not altogether sure that we will see that final sell-off, if this rally continues to gather strength."
And then, I finally finished up by saying:
"I just have this gut feeling that the market direction lever has been yanked from bearish back to bullish over that last 18 hours or so. We still might get some shunting back and forth, but the bias appears positive for now. Seems we're back to the old buy dip mode."
Well, even I was surprised by the resilience of this wiley old bull as the upward momentum began to re-build in the afternoon with a snowballing force and from thereon the market hardly looked back as the Dow Jones embarked on a blistering 230 point rally sending the matador shorts running for cover.
I would simply add to my opening statement of Thursday, that I think that FNTN acted superbly last week from technical standpoint. We had a classic reversal by Thursday's close and the early re-test Friday led to sustained and increased buying all day, putting in a great close.
What has particularly impressed me throughout this correction and re-consolidation in an albeit lower range, has been the very large number of strong buyers who have managed to show up every day, ready and willing to take whatever selling was offered to them at all levels.
Following last weeks action, I would have to conclude that selling is drying up and the stock is now poised to move sharply higher and may well be sufficiently primed enough to move extremely sharply higher.
Why? Firstly, I have seen this kind of pattern before where essentially the price action has been building a base of value at higher levels and when this happens, a breakout above an out of the lower base invariably gives way to an explosive up-move. Saw a classic example of this just the other day.
Secondly, incredible as it may seem and I can only report to you what I am actually seeing: My indicators are signalling a much stronger buy, (about double the strength, in fact) of what I got before the mid to late April blastoff from the initial nine month base.
And thirdly, it's the same old story. Those who panicked and sold stock in the mid to low .50s last week are now kicking themselves for not holding, to the point that I believe, some may want back in and other side-liners and those indecisive left behinders will be scrambling to get back aboard, if and when the price really starts jumping and the momentum players rejoin the party for the next real ride. From a technical standpoint, a serious penetration into Dollar territory, will in all likely-hood, create an enormously bullish scenario for this issue.
In light of the above developments, I have been looking back at my comments in contained in post #1056, wherein I upgraded FNTN to an 'outperform' accentuated with a 'strong buy right ahead'.
Given the unprecedented strength of my indicators thus far, especially during this year and the potential for FNTN to increase to a 10 rating, (we are now a virtual 9), which would be its highest rating yet. I am therefore prepared to go out on a limb at this time and upgrade even higher to a 'No holds barred, pound the table, buy signal'.
I had intended to send out a 'Financial Intelligence' Email report, along with my comments of Thursday, mainly because I had very strong feelings all week, that contrary to conventional wisdom on Wall St, I believe that the next great growth wave may be about to begin, powered by the renewed technological breakthroughs that are in the process of unfolding along with the potentially powerful combination of a backdrop of unusually favorable economic conditions.
Perhaps this is what Wall St began to foresee as it staged such a dramatic recovery late last week. What is this market seeing, that we are not yet able to?
A lot of non-believers, (many of them disbelieving bears of recent years) are still pointing fingers at all the reasons why the market is so allegedly overvalued in comparison to just about every other comparable period within this century. And yet, the market has continued to relentlessly surprise and confound even the most optimistic forecasters. Therefore, we can only conclude that as it has done so many times in the past, the market is obviously seeing better times ahead, that we have yet to witness, in terms of economic growth and productivity.
Whilst some of the armchair generals at the fed have continued to fight the last war by clamoring for a rise in interest rates, the Fed Chairman of the Joint Chiefs has managed to keep his cool and has done a phenomenal job in the process thus far, by sticking with the status quo.
In trying to balance the economic pros and cons of a surging economy versus a collapsing Asia, which in turn has surprisingly acted as a kind of dampening governor on over-excessive growth, perhaps the Fed Chairman has also factored in some of the other beneficial effects that have seem to have befallen us, such as the 'Triple Tax Cut' that we have so far been experiencing during most of 1998.
I am calling them tax cuts, because their effects are the same: A 50% cut in oil prices, drastic cuts in communications costs and last but by no means least, in what is now the largest sector of the economy, the biggest 'tax cut of all' as reflected by the continuing downward spiral in the cost of new innovations and breakthrough technologies that are further boosted by the addition of ever more powerful computing power and productivity. All this just seems to keep the economy humming along nicely without the undue threat of apparent price inflation in any sector, save some recovery in housing.
At the same time, more Americans are working today than at any time in history, unemployment is at 28 year low and real wages are finally rising, albeit gradually at the same time as welfare rolls are plummeting. Is this a great time or what?
As long as this near perfect World scenario continues and make no mistake, this is an enormously powerful trend. Strong growth could re-emerge in six to nine months, that would more than justify today's stock prices. If inflation remains low that far into the future, it's hard to see too much going wrong between then and now and there is even the potential for the still problematical trade deficit to be reduced thanks to the reduction in oil prices and a potential rebound in Asia and an already strong Europe and booming Latin America.
Let's see what tomorrow brings as we await the next clues of market direction...
Rgds
Wiz |
