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Non-Tech : Moguls Mantra to the Markets -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (35)	12/8/2000 9:57:52 PM
From: noneed	Read Replies (1) \| Respond to of 220

i've read IBD for years, and have read all the IBD/o'neill books, and i won't be too quick to call this the bottom. not all follow-through rallies hold water. IBD called several over the past few months that failed. a promising sign, but no sure thing. besides, the market bottom means nothing in this theory unless you buy exclusively stocks breaking out from their bases, with a RS of 80+ and an EPS of 80+, etc. -- hardly the fodder of the standard si crowd. cautious optimism from monday's IBD: investors.com -------------------------------------------------------------------------------- The Big Picture Monday, December 11, 2000 Economic Data, Rate Prospects Spark Dow, Nasdaq Higher Investor's Business Daily The stock market followed through Friday. But it may choke on chad Monday. The Nasdaq spearheaded a powerful session as the tech-heavy index rallied 6% in heavier volume. But just after the market closed, the Florida Supreme Court put the election back in play. On a 4-3 vote, the justices ordered an immediate hand recount of all ballots across the state that didn’t register a vote in the machine tally. The ruling prolongs the uncertainty that’s been plaguing the market for more than a month. Not surprisingly, the major indexes plunged in late trading on the futures market. S&P 500 futures tumbled 35 points after the close, wiping out the 26.34 points the big-cap index climbed during the regular session. Before the court’s decision, the market had delivered a bullish performance. Six days into its latest advance, the Nasdaq surged as volume swelled 33% to 2.3 billion shares. The session served as a follow-through confirmation of the attempted rally that began Dec. 1. No bull market has started without such a signal. It’s no guarantee, though. The market’s volatility and dominance by massive mutual funds has generated more false rallies in recent years. But as long as you maintain your buying standards and quickly cut losses, you reduce the chance of getting hurt in a bull trap. Look for quality stocks breaking out of sound bases in the coming days and weeks. They will be the market’s ultimate confirmation. There are good reasons for the market’s recent bottom to hold. For one, the Nasdaq has been through the worst bear market since 1973-74. During a punishing nine months, it lost as much as 51%. That’s gone a long way toward wringing out the speculative fury that inflated tech stocks from October 1998 to March 2000. Fed chief Alan Greenspan, scared that his economic soft landing may turn into something much harder, has signaled that rate cuts - not hikes - are in order. Not all new bull advances shoot straight up. They may back and fill for months before finally taking off. Indeed, the daily headlines will continue to be full of profit warnings and slowing economic growth, which may make for choppy trading. But the market looks ahead. And the prospect of rate cuts changes the picture over the next six to nine months. At least one factor casts doubt on this confirmed rally. Fear increased by some measures, but never pervaded the market. Option players turned tail on Nov. 17, pushing the put/call volume ratio to 0.92. For every 100 bullish calls, they bought 92 bearish puts. Although high, that reading failed to pierce the 1.0 level that coincided with major market bottoms in the past. Investment advisers couldn’t have been bothered. Even as the Nasdaq collapsed in recent weeks, they acted as though everything were fine. Their record doesn’t warrant confidence in their outlook. Year after year, they’ve been out of sync with the market. They are extremely bullish at the beginning of bear markets and extremely bearish once stocks recover and rally higher. -------------------------------------------------------------------------------- © Investor's Business Daily, Inc. 2000. All Rights Reserved. Reproduction or redistribution is prohibited. For reprints, call Scoop Media Services (800) 767-3263 ext. 305.