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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 690.40

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4:00 PM EST

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To: space cadet who wrote (17931)	10/9/1998 2:12:00 AM
From: Clint E.	of 69746

Hello Space Cadet. I had to check on today's news to see what fueled today's snapback rally. Nobody should be surprised by today's volatility after looking at plethora of news clips that had surfaced in the last 24-hours. The negative news were: 1. Japan blew up on worries about stronger Y hurting their exports. 2. Europe sold off on disappointment with the 0.25% rate cut by the Bank of England and on worries about weaker $ hurting their exports. 3. MER lowered projected growth rates for the next five years in NOKA & ERICY. 4. Abby Cohen reduced SPX earnings estimate; 1998 EPS: $50.50/shr---> $49.00/shr. 1999 EPS: $55.00/shr---> $52.50/shr. 5. Acampora revised his targets down; SPX=745-870 & Dow=6500-7000. 6. The House voted to impeach Clinton. The positives news were: 1. IMF promised early rescue package for Brazil. 2. Rumors of an early cut by the FED was surfaced. The good news was certainly dwarfed by the bad news and many of us should wonder why the markets staged a rally in the afternoon and examine the sensitivity of the markets to various news. Could it be that the markets are desperately looking for another rate cut? Could this be the bottom in two extremely battered groups, the tech and banking stocks? Was this “enthusiastic buying” or “opportunistic buying” that pulled the markets off their lows? Are people more positive now and would give the benefit of the doubt on the bullish side from now on? It is too early to tell and we need follow-through rallies to support the notion of any short-term bottom. I think the markets are still fragile, especially with DOW being at 7700. If we don't get a few rounds of good news we would test today's lows in the NAZ and Accompara's upper 7000 target for the DOW before the end of this month. If we get an early rate cut followed by sustainable rallies, we have seen the lows. We need some kind of stimulus package.(((BTW, I am worried about Accompara's call. He can move the DOW.)))) My general feel is that regardless of how low DOW drops, today's action in tech. stocks speaks very bullishly that buying csco, dell, msft, lu....of the tech world would pay off in the long run. The interest in these stocks was “enthusiastic buying” and we should all remember that next time, no matter what Accompara or Favors say. >>>What's your forecast for tomorrow? As far as NAZ, I think it is going to do OK in the next few days until INTC reports earning. Clint

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