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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Terry Whitman who wrote (31796)	10/3/2000 9:20:41 AM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 42787

Agree we are setting up for further pain with a bounce first. Since I am addressing stuff I read here, figured I would go ahead and post what I wrote today on our site... By L3_Aka_L3 on Tuesday, October 03, 2000 - 09:04 am: Edit Running through my charts last night, the ones I post here were mainly mixed with a slight bias downward and the other ones on my watch list had a definite negative look. Howvever, the index charts didn't look that bad. There appears to be more upside potential than down for the short term speaking in index terms. Some of the things that make me think this morning's ramp in the futures might be different and actually hold this time... I think the DOW was useless for hints as most of the gains were isolated in IBM, JPM and LU. WMT and a few others went the other way but were weighted less thus the increase. However, the OEX held better than the SPX and once again outperformed the NASDAQ and NDX. I think this is once again showing the broadening of buying on the market that I e-mailed some people about this weekend. People are not hoarding into the same high flying stocks and are instead looking for some value and diversification. This is healthy and could provide the base for a short term rally. I am still looking for up then down. One thing that alarms me is many of the stocks that are strong the last week or so are doing their advances on declining volume. This makes me still believe we are forming mini wedges that will break downward later. There was some talk on SI about the call for the old tech leaders to tank before a lasting bottom could be for real and it was asking why. I also believe this as the fall in the old techs would be a signal of capitulation or at least a realization that traders are asking themselves how much these are really worth. Of course no rational person would come to the conclusion that this fluff is worth anywhere near these prices. A market based on FA is much healthier than one based on Momentum. Don't get me wrong, I still think there will be plenty of Mo Mo investing/trading and also think many of the generals will be bought before smaller issues. One thing to mention in this regard also thoguh is IF we can get a washout down the road, many bull legs are born out of a changing of the guard so to speak and old favorites are cast aside for newer pipe dream stocks. It would be wise to try and spot the new leaders as soon as possible. While buying of GE, SUNW, CSCO, EMC after a washout will happen, there will emerge a new set of leaders. Of course all this is Only valid if there is a washout capitulation bottom and not now. Note that EMC is still near it's high, SUNW is less than 10 points from it's high, GE is still near a top etc so this doesn't apply right now. I only bring it up because it was a topic of debate on SI. washout in the old generals would be an alternative bottom indicator to the VIX if it is true that the OEX just isn't traded enough anymore to be a reliable indicator. I am concentrating on some broken chart this week still. AMAT with a PE of 32 is still over priced but is better than before. WMT as we get near X-mas and a few others. I am looking at the bigger stocks and old street favorites since I think money will try to head there first to dress up the indexes and force them higher to counter the lousy Mutual fund mailings that are headed to J6P's door. I am not rushing in, just watching for now. The jump in ADM yesterday also has my interest. As Don wrote, many think or better yet, think they KNOW we will go up end of year. I think a false rally up to draw in a few more traders and attempt to keep people in thier funds is likely before the next shoe drops. The NASDAQ is sitting right on the Loooong term mid tine fork and the OEX held support yesterday. SPX and DOW aer also clinging to the ledge. While support can fail, the cycles are just so low I don't think they can drop it through there without bouncing up first to gain some speed for the break through. I added slightly to my longs at teh close and would like to put my kids in XLK today although I have some reservations about going too long ahead of MU earnings. Good Luck, Lee 888888888888888888888 By L3_Aka_L3 on Tuesday, October 03, 2000 - 09:12 am: Edit Ooops, forgot to mention one other thing. I also have been reading a lot of people trying to catch RFMD on the decline. One look at my weekly chart on it and the descending bearish triangle is obvious. While not 100%, it looks too dangerous to try and catch the falling knife. If one is feeling the need to trade this one, I would at least wait for some sort of reversal signal. Good Luck, Lee