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To: Clappy who wrote (748)	7/29/2000 12:03:41 PM
From: Clappy	Respond to of 1115

Paul Cherney says: Friday July 28, 2000 (5:00 pm ET) Capitulation Monday By Paul Cherney, S&P Market Analyst NEW YORK, Jul. 28 (Standard & Poor's) - Here's the potential problem for Monday: People will have all weekend to ruminate on the state of the market, and the chances of another big decline in the NASDAQ. A lot of those people will probably decide to sell on Monday. The "buy the dip" mentality has lost its followers. Market particpants have already learned that markets can dip and can then dip further and that realization thins the ranks of those willing to just blindly "buy the dip." Think of the price action in the NASDAQ since its March 10, 2000 record high close of 5048.62, first, down 34% into its 4/14/2000 close of 3321.29, then there was a 19% rebound into the 5/1/2000 close of 3958.08, then another plunge of 20% into the 5/23/2000 close of 3164.55. Then a rally of 35% into the 7/17/2000 close of 4274.67, and now the NASDAQ is heading lower again, who's to say that the dip doesn't have another dip after it? Some sort of further capitulation should occur on Monday. NASDAQ sub 3583 prints are possible. The rebound from that dip will be fueled by short-covering, and short-covering rallies usually only last 1 to 4 trade days before a retest of the lows unfolds. Chances were only about 1 in 4 that the NASDAQ would close below the 3695 level, but we've done that. Now chances are about 1 in 8 that Monday's market heads lower and closes at the lows of the day. So for me that means some sort of a capitulation and then a rebound looks likely. It will be intraday measurements of volume and breadth which will offer the best opportunity to determine if the market is ready to bounce. Right now, sub 3583 prints seem a "given."