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

To: Paul Shread who wrote (38350)	12/18/2000 5:37:31 PM
From: Secret_Agent_Man	Read Replies (1) \| Respond to of 42787

THE BUZZ AT THE BELL Suddenly the Street is buzzing with the possibility that the Fed will decide to cut interest rates tomorrow. Until last Friday, no one was entertaining the idea of a rate cut so soon. But now people are saying it's a 50-50 possibility. What changed? You'll hear that the economy is slowing, the market is slipping and consumers are sleeping. And all of those things are true. But the down-and-dirty that really scares policymakers are reports like these from today's minor headlines: Aetna said today it will eliminate 5,000 jobs in a restructuring of its health insurance business; Gillette announced it will cut 2,700 workers (8% of its workforce) to reduce costs; Solutia (formerly part of Monsanto) will cut 800; and GM will trim 20% of its operations in the next three years. Cuts like those put the Fed under tremendous pressure tomorrow, and explains the rally in financial stocks that lifted the Dow today. The Dow closed 210 points higher and the S&P Bank index was up 4%. Citigroup gained 3% and J.P. Morgan was up 4%. Utilities and transportation stocks were also strong. But the Nasdaq lost 28 points in its fifth consecutive day of losses. Trading was heavy. Finally, Time Warner warned today that its earnings will fall short of expectations in this quarter. The company blamed weaker than expected music sales, softening advertising revenues, and disappointing ticket sales for "Little Nicky," a movie in which Adam Sandler plays the son of Lucifer Beelzebub. Time's stock lost 14% and America Online, which is taking over Time, lost 13%. It's interesting (or confusing) that the world's largest media company (soon to grow larger) would single out for blame one film by a comedian who is not in the pantheon of comic giants. Is this a case of refreshing candor? Refreshing obfuscation? Or just blaming their problems on the Devil? To quote Bugs Bunny, a comic giant from Warner's past: "What's up, Doc?" Peter Nulty

To: Paul Shread who wrote (38350)	12/18/2000 11:16:31 PM
From: JRI	Read Replies (3) \| Respond to of 42787

Paul- I have to say, I am totally befuddled about tomorrow. Both bulls and bears can make a good case for a major break coming.. Bulls: 5 straight Naz down days and more than 300+ pts....and in the Sept/Oct/Nov/Dec period, Naz always rallied well (at least one day) after such a period...even in such a severe down trend. Don's indicator is showing a CLASS 1 buy. TRIN is saying buy. Put/Call is saying buy. Some cycles (50 day) are pointing to tomorrow as the low. We are almost at Xmas-end of year, and the market is usually pre-disposed to rally...Also, to be down 2 of the 3 months of the 4th quarter, well, that hasn't happened in a very long-time. We are still making higher lows. No rally into Fed meeting, so good news (easing bias, Fed cut) would be unexpected in all likelihood. Bears: Many stocks have no basing patterns. Many tech stocks are still richly valued. Bearish engulfing pattern on Naz chart (negative). Vix looks ready to break to the upside (not good). There is a real concern about cutbacks in tech spending. The world economy is in a mess and not getting better anytime soon (will tech spending cuts also go on overseas?). Salary raises eating into margins. Naz showed no strength today, selling off from open, and never getting up. Although many stocks at oversold levels, no one seems willing to buy. Bond market pricing in a 40% chance of a cut, yet over 85% of Fed-followers (per WSJ) expect neutral bias..Even if Fed cuts rates, earnings visibility poor for many Naz stocks... (Feel free to add others)... I am left trying to figure out tomorrow, and am struggling...would love to see a down open (even washout crash), but to buy that? that is the question....likely the really big market move comes after Fed announcement...but which way? Fed seems to be giving (in the press) differing trail ballons....what's that about? Cut Greenspan really cut one day after watching Bush? Seems unlikely. Easing bias seems most likely.....and I suppose your idea of a modest rally (if easing bias)...any other thoughts?