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

To: Lee Lichterman III who wrote (37050)	12/2/2000 3:59:22 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 42787

Random thoughts for the weekend and yet to make a determination from them but ideas for discussion. There seems to be some pretty valid Technical reasons for a further decline to around 2250 NASDAQ, 9400 DOW and 1274 SPX from the daily charts and old trend lines going back years. Some of the targets could be lower for example the NASDAQ if one factors in Don's historical relationships to other indexes. On the other hand using my weekly charts, I have some pretty good lines that show at least the SPX and NASDAQ could have reached a low this week and we are ready to base for a while or could even bounce a bit before retesting later. This is backed up by my perception that many stocks have reached good bottoming areas and are either at, or close to supports. Only the last of the Mo Mo favorites are still in the extreme nose bleed areas and even those are finally starting to give. A final flush could be close at hand for a hammer bottom or tweezer bottom soon on the candles. While oil is rising, the dollar is falling and recession fears loom, the economy gauges are now showing about a 2 1/2 percent growth rate which is right where Greenspan wants it. If he believes that he can keep J6P from buying the NASDAQ hype back up to ridiculous levels and fueling more huge capital gains spending, he could start lowering his bias and actually cut rates soon to avoid over shooting the slowdown target. There is further incentive as much of our imaginary federal budget surplus is based upon a continuation of large capital gains taxes being paid. No market gains, no taxes and we are back to deficit spending that even Clinton can't hide with fancy number crunching. Will AG cut rates soon? The problem with this is the lack of fear in the market since it appears everyone is still trying to buy the bottom of the market expecting it to snap back. While I read some bullish analysts quoting high put call ratios, the CBOE site shows plenty of enthusiasm still and the small guy is still on the opposite side of the commercial SP00 traders who are still heavily short. This may show AG that it is still too early to ease. All around SI as the indexes were melting this week, there was hardly anyone spewing gloom and doom. Everyone was still trying to find the bottom and buying. I even saw some of the hypsters returning to threads that were spouting bullish rubbish 200 points ago and show up right before every plunge. These guys are priceless to me as they seem to call every short term top by accident and motivate me to pull in my horns and buy more puts. -ggg- I think the economy is still OK but I am worried about all the debt out there. Gas is high, layoffs in Dot bomb companies is now rampant and telecom is slowing their buildouts reducing the need for switches, fiber etc. How many people will be building expensive new homes with imported marble counters and custom made cabinets versus the standard fittings if they don't know if they will be laid off soon or at least not be able to cash in their stock options to fund that new Jacuzzi. Banks are already holding a lot of mortgages backed with worthless options, 2nd mortgages on property that won't be worth half what the houses were appraised at at the height of the mania and corporate notes on companies that don't or won't exist in a few months or years. How many tax dollars will be needed to bail them all out and what will be the market's reaction when this finally is exposed. I am actually surprised slightly by the PC slow down as while I believed the companies were seriously over valued and that growth would slow, I know many people that are buying new machines right now or at least building new ones so the timing is a bit off. I just finished building one a couple weeks ago and am getting ready to build two more since DRAM prices are so low and other components are also cheap. Granted most of my friends and myself build our own versus paying DELL, MUEI, GTW etc to do it and we all generally use AMD over INTC chips but the demand is actually moving up for those of us that have had machines for years but are now ready to upgrade seeing the cheap prices. MU chips are 1/4 what they were a few months ago and NEC chips are extremely cheap now. As I have stated before the double top in the dollar and weekly sell signal are ominous for the market. Foreign money may start leaving if this goes much further as they see both the affect of falling stock prices and dropping currency spreads impacting them harder than it does those of us living here. Basically as I write this, the biggest quick conclusion I come to is demand is still going in the economy although it is slowing and will continue to do so but there is a shortage of cash for many of the companies that produce or provide services due to market conditions and already questionable debt. As labor costs are rising, stock option compensation may be tossed as employees demand real cash further hurting corporate profits. At the same time, AG is unable to goose the market to provide this liquidity since there is no fear, no capitulation because J6P has been programmed too well to buy the dip and any attempt to provide a liquidity injection will just be spent on manic stocks with unrealistic growth projections. The economy has reached the level of growth deemed healthy and sustainable yet the tightrope walk is far from over since we now risk over shooting to the downside yet the average investor has lost all knowledge of value investing and only knows how to chase what is going up at the moment. How to fix the problem? Heck if I know, ban private investors from buying stocks and only allow 80 year olds who recall the past bear markets to trade along side Warren Buffet? -gggggggggg- As I said, nothing real earth shattering here or providing direction but just a post to spur thought and discussion. Good Luck, Lee

To: Lee Lichterman III who wrote (37050)	12/2/2000 6:09:29 PM
From: eddieww	Read Replies (1) \| Respond to of 42787

"...much of the earnings in tech is vaporware." Couldn't agree more about the unreliability of any rational fundamental analysis, and the tricks that are played in order to "monitize investor ignorance". Thing is, even without those tricks, reasonable FA has been ineffective for quite some time, especially in tech. Momentum trading off the charts has been and is the only way to not get bankrupt trading tech.

To: Lee Lichterman III who wrote (37050)	12/3/2000 1:15:15 AM
From: lightwave51	Read Replies (1) \| Respond to of 42787

<< Heck I think CSCO's earnings have actually been dropping yet they report growing numbers each quarter while core business goes backwards. How does one compute their PE?>> Thus Cisco's entire market capitalization, currently around $360 billion, is based on earnings that are in real terms consistently negative, but are not clearly reported as such. vny.com