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

To: Gersh Avery who wrote (40057)	1/5/2001 9:39:54 AM
From: timers	Read Replies (1) \| Respond to of 42787

b of a news not exactly the bullish helper the mkt needs.

To: Gersh Avery who wrote (40057)	1/6/2001 6:05:51 PM
From: Lee Lichterman III	Read Replies (4) \| Respond to of 42787

Nice call Gersh, I should have listened to you and my post the night before about the High volume and TRIN combo. Haim, Nice post! FWIW, I just posted this on our site. I am waaay behind this morning after taking the wife out for our anniversary last night. ( The one night a year we can dump the kids and pretend we're young again -gggg) I won't have my charts updated until tonight probably but here is what I see so far.... By L3_Aka_L3 on Saturday, January 06, 2001 - 05:19 pm: Edit Great Find by Les on SI. Here are the NASDAQ stocks making new highs. Note how the highest PE on the sheet is only one at 30 and most are in the teens or under 10. Mostly small financial stocks being bought after being beaten down on hopes of the rate cut bailing them out. Not your normal tech stocks here...... stocksheet.com I don't know when I will be posting my charts. I am looking through some major folders trying to get a handle on this. Here is my view thus far..... We are not in danger yet but are teetering on the edge. My composite index of stocks shows we are going to go much lower but I still have the view that the DOW will drop more than the NASDAQ ( stubborn aren't I -g-) I have a floor on the NASDAQ pegged at around 1850 to 1980 but am not so sure we are going to make the lower low and see the possibility of a bounce higher while the DOW takes over the lead of dropping. In the NASDAQ/NDX I think we are finishing off a wave 3 decline and are very close to starting a wave 4 rise or counter trend rally that could last months before the final drop thus my bullish view on the NASDAQ. It isn't that I am not saying we can't drop from here, it is that I see the floor somewhere between here and the 1900s with more upside potential than downside using a mid term view. The DOW on the other hand is getting high valuations compared to estimated growth in a recessionary environment and I only see a high in the mid 11000 range while the downside potential is down around 9400. Therefore I see much more downside potential there than upside potential in this index. My cycles have been inverted for the last 3 mid term cycles and are showing an impending turn point in the next few weeks. Since we seem to be still dropping and the cycles are heading upwards ( inverted) I therefore think we are again about to start a mid term rally at that time when those cycles hit their mark. There are of course wildcards in the situation. We have some major earnings starting soon. Besides BRK.A, I use GE as a gauge of the market since they have their hands in everything, finance, industrials, consumer products, etc. They are still valued very high and if the economy is going to slow down, obviously they should slow as well. A drop in their share price could move the market. The wild card here is the more lax rules in accounting announced two weeks ago about acquisitions so GE could mask potential problems by utilizing these new rules on amortization of goodwill, pooling etc. SUNW reports earnings on options expiration week ( 2 weeks ). They are seen as a tech gorilla and their earnings results as well as forward guidance will be a key factor in how we trade shortly thereafter. Of course all the other big companies will be piping in as well after that time frame so earnings will be the focus. Friday looked horrible but we are still in the bottom end of a fib retrace of the rocket shot up following the FOMC rate cut. This could be a dip to let those left behind in, it could be a consolidation phase as shorts are covered and longs take the lead. However I was very concerned about the high volume Thursday with no movement in the indexes with a high TRIN. I should have listened to myself and admitted I was wrong in my bullish view and that as I wrote here, that was a distribution day which would lead to more selling. Of course hind sight is always 20/20 and my view that night was in fact what was happening. I let the new highs new lows keep my focus upwards instead of listening to the market as gauged by TICK and TRIN. This sheet of new highs shows it is rummy companies that are masking what is really going on. As a note to financials, Russia was reported this morning to be defaulting on their debt payments again which are due now. The drop in the utility indexes are also a grave concern as they tend to lead the market. I noted this morning that the prior bullish Transportation index just fired off a sell signal on my system and the Airline Index formed a hanging man formation on Friday. I expect a drop in that index from 177 to around 155 and to help that view out, it was just announced this morning that OPEC will likely be cutting production 1 1/2 to 2 million barrels a day. Basically, as of now ( and I am not done with my charts yet), I am bearish on the DOW, still slightly bullish on the NASDAQ mid term with the understanding that if the market heads south on Monday and looks to break the low, then the next support area is around the mid 1900s. There are a ton of supports clustered in the 1850 to 1980 area so I doubt we will collapse through those levels and I would likely exit longs, play mild short on a break of the 2200s then cover and start going long again around those 1900 areas. Of course do your own DD and don't follow me, I am lost too -gggggg- Pay attention to the TICK and TRIN to gauge if the big money is still dumping or is starting to accumulate if the lower scenario plays out. I am leaning towards a washout scenario slightly because our divergence indicator is showing that a sharp drop is likely before a turn. It is so hard to post what I see without showing this indicator but we can't give away all our secrets now can we? -ggg- Basically this is pointing to a sharp drop of a few hundred points and then triggering a sharp buy signal for a mid term trend change. Of course this part of it is speculation based on my interpretation of the indicator before it actually does this. As I said before, there is a good possibility we could bounce right from here. It is just my read so far this morning that from the news I have read, my understanding of these events and the chart reads thus far, that the most likely scenario is for us to washout the lows, scare the living daylights out of everyone producing the capitulation we have been wanting to end this wave 3 drop and start a wave 4 rising counter trend rally that could take us up a ways and suck in more bulls before the final wave 5 drop to new lows this summer. Later this year the possibility could come around for the real bull to return as interest rate cuts and all the prior excesses are washed away. Of course it could take years. I will cross that bridge when the time comes. I will try to post some charts that are different than I normally post showing why I have some of these reads later this weekend. Good Luck, Lee