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

To: Gersh Avery who wrote (39997)	1/5/2001 12:23:27 AM
From: Lee Lichterman III	Read Replies (3) \| Respond to of 42787

Good point about the TICK. I guess we shouldn't try to figure out the why but just stick the indicator. Tuesday we had buys on and didn't know AG was going to cut, things just align right sometimes I guess. I still think we are headed up a bit as I said yesterday but a few things do bother me so far. I think too many are taking this whole California Power thing too lightly. There is a lot of derivative exposure involved here. I think the articles I read stated about 2 billion in the immediate future due and about 20 billion total floating around. mean think about it, the only other time I recall the Fed acting like this was 1998 with the LTCM blowup. This time AG goes out to Calif. over the weekend and then a few days later does a surprise rate cut and a drastic one at that. Today on NPR they were discussing the situation ( without a market slant) and said the easiest way out of the situation was for PG&E and others to just declare bankruptcy. That way, the government wouldn't have to bail them out since this was getting to be a major political issue out there. Think about it, what better way to bail them out without bailing them out than to ease rates so the banks will float the loans for you after they close the doors and file for all new debt. The lower rates ease the pain a bit. Of course PG&E had their credit rating dropped today after the close to BBB so now the premium will be extra sweet. You have to say one thing for AG, he takes care of his banking buddies. My other concern is the high volume today on a high TRIN reading. Massive distribution and blatantly obvious. The question is was it the selling of the fluff no earnings stocks that got ramped yesterday on short covering and defensive issues like MRK, PG, JNJ, KO etc or was it broader selling? it will take a day or two to probably tell for sure. As Don said though, the TRIN readings are getting to buy territory if the rules are the same in this bear market. Heinz thinks many of the rules have changed and some old indicators won't work anymore. Which ones I don't claim to know. There was a nice improvement in new highs/new lows which is bullish and we held the support areas, at least so far. Looking at an intra day chart, many stocks and indexes appeared to be forming bullish flags off the pole following the rate cut yesterday IMO. I am still holding long and will not be playing any more downside on PG, JNJ etc but will likely beat up on MRK a bit more as well as KO. The semis look like they might be weak as well but it is too early to tell. I just watch and see if an entry for shorting appears or not. Employment and housing expectations for tomorrow. New homes sales - 913-940K AVG Work week - 34 hours Hourly earnings - up .2% New payrolls - 110K and the biggie, Unemployment rate - 4.1% Good Luck, Lee