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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (37079)	1/9/2000 12:09:00 PM
From: Lee Lichterman III	Respond to of 99985

Found this tidbit on a known bear thread I admit but the post gives notice that others are starting to figure things out. A blaring example in the Oracle bit.... >>>>. 1. November was the fastest and biggest one month rise in margin debt ever. Of course, my guess is December was worse. 3. He mentions that in the 1969-1970 bear market, the ten largest computer stocks, including IBM, fell an average of 80%. Many again lost 80-95% in the 1973-1974 bear. In 1989-1991, the Fidelity Select Computer Fund saw its assets drop from $119 million to $16 million. Gee, last time I looked, that fund has a bigger drop this time if it goes back to $16 million in assets. <g> Anyone think they may have sold some stocks below cost at that time? 4. Nice comment on Oracle. In 1990, the pe peaked at 32 times while revenues grew 56%. Today the stock is selling at 125 eps with sales growth last quarter of 12%. Looks like rational behavior to me. <g> It reminds me of the story a manager told about Thailand at the peak of the emerging market mania. "It used to be I could find stocks with 20% eps growth selling at 5 times. Now, I find the same stocks with 5% eps growth selling at 20 times." If I remember correctly, the 20 times level didn't hang around long. <g><<< 5. The best comment of the issue, about the reported tech spending boom analysts see for 2000: "analysts are now predicting a rebound from the decline they never saw coming." 6. He found it funny that Gateway used Y2K as an excuse for missing their quarter as they do almost no business with large corporate buyers. It didn't surprise me. They lied. What else is new? <g> 7. Retail desktop unit sales were up only 11% in November, and December could be worse. Let's see, with unit sales growth in the mid 20% area earlier in the year, revenues were down 9.7%. That can't be good. <g> 8. Question of the day: In November, of the top 5 selling notebooks, how many were powered by Intel processors? If you are a good Catholic, then you know the answer is NUN. <g> 3 AMDs and 2 Apples. 9. Cell phones seem to be coming down from peak growth. 10. 1995, Sox at 300, sales of chips at $150 billion. 1999, Sox at 700, sales at $150 billion. And you can count the new pair of dimes in that huge sales growth figure. <g> Message 12510732

To: Lee Lichterman III who wrote (37079)	1/9/2000 2:03:00 PM
From: HairBall	Read Replies (1) \| Respond to of 99985

Lee: I thought that would be your answer. There is no such thing as being absolutely sure when timing the market or forecasting levels. You know that, I know that. The most specific technique I know of for forecasting levels is E-Wave. It is subject to interpretation as is most technical analysis. The best at E-wave I have seen, seem to need almost a daily revision. I personally do not find it reliable enough to use. I do think there is great value in technical analysis by latching on to those indicators and charting techniques that yield the highest percentages. Trend lines, support/resistance areas, price action patterns and volume patterns are all measurements of investor/trader psychology, in my opinion. However, to be effective and reliable they have to be done competently. This competence only comes from a good understanding of how they work coupled with experience. Then the above should be coupled with a "few" good indicators that work best for each individual. Then you have a system. No system is infallible, but they do assist greatly in removing emotions from the equation and that is important! Then, in my opinion the best way to present this information is with a picture (charts and graphs) coupled with some commentary. If your charts are good, little commentary is needed. A picture is worth a thousand words. Once folks see how its being done, they can work at doing it for themselves instead of relying on someone else to feed "just" the numbers. For those that do not have the basic knowledge to understand charts and graphs, there are plenty of books and web sites out there that will assist in educating. Some times the charts are just so revealing you just know what is going to happen, but the truth is no one really knows until it happens. Except the privileged few and I am not talking about individual investors...<g> I have intentional left out fundamental analysis as that is not my forte. I do believe in today's market it has taken a lesser role. However, having a good understand of sentiment has taken center stage in this mania...<g> Regards, LG

To: Lee Lichterman III who wrote (37079)	1/9/2000 10:54:00 PM
From: Lee Lichterman III	Read Replies (4) \| Respond to of 99985

Was asked to post this from a lurker who would like some feedback from the regulars on his thoughts.... >>>>The Stock Market I do not believe that the "pullback" is over. I could sight numerous examples of valuation, but you allready know them well. Instead, I am focusing on psychology, as it appears to be the main driver of the market at this time. The two examlpes listed, speak both, to the attitude, and the intelect, of the participants. Message 12504333 Message 12504169 All my comments relate to the NASDAQ-100 high fliers unless otherwise stated, as that is the area I am tradeing. I am currently short. The exact # of points that the NASDAQ rallied from the Oct.18 low, to the all time high is 1536.91 intraday. The exact intra day low on Oct.18 was 2299.95 The exact, intra day, all time high was 3836.86 The exact 34% fibonacci retracement from the all time high would have been 522.54 points. The ACTUAL retracement was 522.11 points.(a difference of .43pts.) The NAZ-100 broke it's 21 day moveing average for the first time since the rally began, on this pullback. It has since, rallied back to the 21 day M/A. (if you want the tightest M/A that has contained all dips since the rally began, I believe it is 18) not includeing the most recent breach. I expect the 21 day M/A to provide strong resistance to any further upside.(to see a good example of this, put a 21 day M/A over the SPX or OEX durring the 1998 summer/fall sell off. The market was consistantly contained by this M/A, with minor deviations. The market has since rallied back up, past the 34% fibbo retracement of the sell off. The next fibonicci numbers are 55% and 61.8% I expect one, or the other, of these two retracement #'s to contain the current rally in the short term (5 days) If the market rallies to retrace 55% of it's loss, that would be 3601.91 intraday. If the market rallies to retrace 61.8% of it's loss, that would be 3637.41 intraday. If the market rallies to retrace either 89% or 144% which are the next two fibonicci #'s I am screwed. If I am correct, and the NAZ-100 bounce is contained by the 55% or 61.8% retracement of it's initial pullback (3601.91 to 3637.41) intraday, I would then expect it to head lower to retrace either 55% or 61.8% of it's total move up of 1536.91 pts. A 55% retracement of it's 1536.91 move would take the NDX to 2991.56 A 61.8% retracement of it's 1536.91 move would take the NDX to 2887.05 (I prefer this # because it is very close to the top line of the tradeing channel from which it originally broke out of. Beyond this scenario I would have no idea what would happen next. Possabilities include another short, sharp rally followed by a further decline to the bottom channel line or a big fat rally. Either way, If any of this were to happen, it would unfold beginning no later than tuesday and ending some time at or near expiration. (1/21/00) My Reasoning For The Above Scenario: #1-The Fed is draining reserves. #2-Some money is buying bonds (not much yet, but some) #3-Does the go-go crowd have the balls to step up, going into the 4th rate hike?(voltair might, but I doubt the hedge funds do) #4-The last Bradley model turn was down from my perspective, and the next turn is on the 17th. #5-Foreign money is leaveing, removeing an additional source of funds.(as evidenced by a weakening dollar) #6-Given the fact that the fed is draining reserves, and some foriegn money is leaveing, I do not think that there is enough money to drive both the Dow stocks and the NDX both higher at the same time. If correct, this would mean that any further gains in the DOW would come at the expense of the NDX. #7-A possible wild card is the pension fund money that is widely reported to be comeing in this week. Although given the strength in the dow, and the fact that the A/D line appears to be perking up, coupled with the disjointed valuations and volatility in NDX it remains to be seen how much goes where. #8-Sheppler is right about the ballance of trade #'s getting huge because this will be the first trailing 12 month report that does not have the phony $11.00 a barrell oil. #9-Finally, to buy any of the wrap I just laid out, you would have to view the NDX and the DOW as two seperate animals, each with it's own set of rules, which is not that great a leap because that's what everybody did on the way up. The street may have just found one more "Lifeboat" that nobody knew about in the DOW.<<<<<<<,