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

To: HammerHead who wrote (41845)	2/1/2001 8:25:01 AM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 42787

Well, I am not looking for that much future ugliness. Only a retest of the old low and probably slightly higher although a target of 1950 would fulfill my fib targets the best on the NDX. As for his picks, while I agree that many of those are good companies, EMC, CSCO for example, calling those PE ratios bargains is a bit silly IMO. Right now they get a premium for expectations of continued growth of 50% or more. As earnings decline or at least slow their growth rate, only then will we get a better handle on what they are really worth and those PE ratios will go the wrong way, especially when viewed in the context of their growth rates. I do think this bear might be short lived and that we could move up the last half of the year or early next year but it is by no means a guarantee. When AG said we may need a tax bill to spur growth in case we don't recover as expected, that showed it was by no means a sure thing. I also think the recognition wave will hit in earnest next quarter as earnings warnings hit en mass. Recall that we are in an over lap period where we are just now starting to feel the last rate raises and the rate cuts won't be felt for 6-9 months. Today's earnings won't be reported on until next quarter. We also have to worry about the Fed going too far and spurring inflation again, especially with the labor market still too tight. Of course the market powers that be are fighting any down tick as much as possible. Just look at this morning's futures. They were negative 20 most of the night yet as the open gets closer and closer they are moving up and are now only down 5. There are no free markets. I will likely close my shorts today since Friday is always up to keep J6P from panicking. Still I don't look for a huge bounce anytime soon. Short on time and have to go. Terry, interesting chart. Too bad we can't see the numbers to figure out where the bottom of that channel is for now. Arik had a good post..... To:Arik T.G. who wrote (652) From: Arik T.G. Thursday, Feb 1, 2001 5:21 AM Respond to of 653 Let's see what we have so far: 1. Industrial production down three months in a row. Last time that happened was in 1991. 2. Capacity utilization down four months in a row, and is now at its lowest since 1993. 3. NAPM down sequentially 10 months in a row (today will be the 11th decline in a row) and is under 50 for 5 (6 after today's numbers) months in a row. We saw a similar decline in the NAPM in '98 (from which it recovered in '99) but the absolute numbers are lower now - Dec and Jan figures (out today) are going to be the worst since 1991. Chicago PM Jan numbers published yesterday came out below expectations and were even lower then 1990-1991 lows. 4. Consumer confidence down 4 months in a row but still relatively high. CC was on a rising trend since its 1992 low until in 2000 it finally topped its 1968 high. The recent decline took CC back to 12/1996 "irrational exuberance" level. 5. M2 - From mid '91 to mid '95 money supply was practically unchanged, M2 rising very slowly from 3330 to 3540- a 6.3% rise in 4 years, giving a yearly rate of increase of only 1.5% . From mid 1995 to date, M2 has expanded from 3540 to 4935, a rise of 39.4% and an average yearly rate of just over 6%. In the last 9 weeks a deviation to the upside from the 6% increase rate is apparent. In other words - AG started pumping money into the markets aiming to soften the landing. So the hindsight figures of industrial production and capacity utilization are already showing a recession of 1991 proportions, but the forward looking CC and NAPM are saying it's going to get worse. Soft landing? Not IMHO. ATG Message 15280422 Good Luck, Lee