We hit my first target Friday so now things get cloudy a bit for me. I am thinking down to my main target of 2K for the NDX and around 50 on the QQQs mainly based on FA but technically I can't make heads or tails of it due to the low volume which leaves us open to whipsaws. I have class 2 over sold signals and last week my weekly signals generated buys before flipping back off on Friday's weakness so we are getting really really close to a bottom IMO.
I actually don't care where we go as I feel the trade will be to fade it when we hit either support or resistance. Here is what I wrote last night........
By L3_Aka_L3 on Sunday, February 18, 2001 - 06:38 pm: Edit
...I tend to agree with Hays. I see a lot of people calling for a cycle turn Feb 23-24th and my own cycles are calling for a major turn in the March time frame. The lack of volume lately makes these whiplashes hard to read but I tend to be looking down, then up before we go really down. Like I said, I could be completely 180 out but I am pretty sure that the correct trade strategy will be to fade the next move no matter which way it goes.
If we drop, I would start buying around the NDX 2000 level knowing it could go to 1800 but I doubt it on this push. I think that target comes later, if at all. On the other hand, if we do manage to bounce somehow, I would start looking for shorts around NDX 2500 and then pile on heavy if we get to 3000-3100. I seriously doubt we can get above that. The shorter time cycles are pretty obvious and we should be nearing a low here soon. Our indicator is also about a day or two form hitting a low. One more good hundred plus down day would do it I think.
I too have been looking for rotation out of the DOW to the Techs but I can't seem to time it. FA wise, everyone plowing into the DOW makes no sense. Valuations are starting to look like tech stocks at the top.
My greatest fear is we do a trading range like 88-92 while valuations are still high. I wouldn't mind it at lower levels but the risk of a steep drop will always be present if we just stall and oscillate right here especially in the DOW stocks.
Anyway, I have to go to a dinner tonight so wanted to get my thoughts out there since the board has been active and my earlier comments got buried in the archives already. I think shorting rallies at 2500 to 3100 NDX and buying dips around 2000 NDX is the way to play it. I use NDX instead of NASDAQ since most people tend to play the larger techs and the QQQs.
Good Luck,
Lee
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This guy is looking along fairly similar lines using E-wave.....
By L3_Aka_L3 on Monday, February 19, 2001 - 07:24 pm: Edit
Interesting he says if we stall at 2500 NDx that is better than going all the way to 3000......
Title : E-Wave update.....
From the German website WallStreet-online
Author: Mathias Onischka and translated by: erniek
The longer-term view:
When you look at last weeks chart, we missed the prjected low of 2100 by quite a bit, ending at a low of 2173.The reason for this was the unexpected relief-rally mid-week, that actually overshot our projected 2400 target. This can actually be taken as a positive signal.
On the mid and long term scenerio, though, nothing has changed, and the analysis from the last few weeks still hold.
Short term outlook: If the NDX doesn't rally immediately at the beginnig of the week, the mid-term positive outlook may fall flat. That would mean that wave v of C, that started end January, is actually an impulse wave (a smaller move within a larger one). Because of the price action in the last few months, where the NDX lost 60% of it's value, wave v shouldn't continue further, and 200- should be the ideal end target.
But: when you look at the short term chart, the end of the week looks like it ended an impulse wave. The fact that we did not hit the prior low (2087) makes it possible that wave v has failed, and must be recounted as wave 1 of v. If this was a typical impulse correction, wave 3 would be 162% of wave 1, which would take the NDX to about 1500 points.
It is more likely that wave v completes a triangle. that way, the actual impulse will be counted as wave 1, and should take us to approximately 1950 as THE low. For that to happen, it is actually important that the index does not climb over 2523 in the next few days. this correction, which should end inthe first few hours of trading, should end before it hits this key resistance area.
If the NDX actually does climb over 2525 in this counter-rally, 3000+ points could be reached in a few weeks, and complete a large wave D. Unfortunately, this makes the mid-term situation far worse, because it would mean the prior low (2087) was not THE low, and we could expect values substantially under 2000 in the second half of the year.
A few words on time cycles: We have noticed that the NDX has established a characteristic 34 day time cycle. Every 34 days we seem to mark a short term high, and then about 3 weeks later (17 trading days), marks a short-term low. Because of this, an no other reason, we expect wave v to end middle March....of course, with the caution that this rule is not written in stone, but is just a technical observation.
Technical indicators: most market indicators are currently on a sell signal, although the oscillators are reaching oversold territory. Logically, a few rally days should neutralize the sell signals generated in January, but buy signals aren't even to be thought of yet.
In summary, we should see a consolidation next week around 2500 points. As long as we don't run over 2520, it should stop any slide past 2000.
To see the actual charts he refers to
clearstation.com
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For all those QCOM bulls, Korea admitted they don't have the cash for the 3G buildout and are backing off. One day later this hit the news wires.......
BT: We blew $14bn
BT boss admits the firm overspent hugely on new cellular permits
February 19, 2001: 10:03 a.m. ET
LONDON (CNN) - British Telecom admitted it squandered £10 billion ($14 billion) in acquiring third-generation mobile phone licences.
Peter Bonfield, BT's chief executive, said the firm had spent more than it should have on new mobile phone licences, which give it the right to broadcast video, data and web services to cellular handsets.
A BT official confirmed Bonfield's comments, first made to the Sunday Times. "BT paid £10 billion more than it should have... especially in auctions in the UK and Germany," spokesman David Orr told CNN.com on Monday.
"That spending had a huge impact on the industry," landing BT with "debts of £30 billion," Orr added. The British and German auctions raised some $78 billion from the sale of permits, money which should have been spent developing services, BT said.
BT paid £5.1 billion to acquire a permit in Germany and about £4.5 billion in the UK. The company also spent another $6 billion on increasing its stake in German mobile phone operator Viag Interkom to 90 percent.
The auctions in Britain and Germany generated enormous excitement, but subsequent sell-offs haven't been anywhere near as successful, with telecom companies baulking at the huge cost of acquiring licences.
Auctions in France, Italy and Switzerland virtually collapsed, as investors took a dim view of the cash being poured into the business. Operators hope the new technology will open up new revenue streams, although some experts have expressed doubts they will be able to recoup the cost of their substantial outlay.
Europe's telecom companies have taken on heavy debt – about 128 billion, according to some estimates -- and seen credit weightings come under pressure in their attempt to build a European foothold.
Paul Mount, an analyst at Nomura, told CNN.com: "BT would have been damned if it did (buy 3G licences), and damned if it didn't."
Bonfield's position is under pressure, according to several media reports of recent months. His admission of overpaying does not hide the fact he "presided over the company's stock price which has fallen from 1,600 pence to 600 pence," according to Mount.
Shares in BT (BT-A) fell 0.3 percent to 598 pence in afternoon trade on Monday.
Credit rating agency Standard & Poor's said on Friday it was studying whether to downgrade the firm's debt-rating. Such a move would result in BT paying extra interest on its borrowings. The company's third-quarter earnings were blighted by a tripling of interest payments.
The company had hoped to reduce debt by floating 25 percent of its mobile phone division but BT has been forced to reconsider its options in the wake of the dismal Orange flotation.
BT's Orr said the company was not ruling out plans to demerge BT Wireless. "We're looking at an innovative non-standard way to float the company, that may involve giving existing shareholders priority in any offering. We're not ruling anything out."
Nomura's Mount said BT needs to strengthen the board of BT Wireless to prove to investors that the company means business. "BT needs to bring on a new chief executive and come up with a strategy that will help improve its position in Europe."
BT Wireless "is starting from a weak position, its mobile phone unit in Germany is the smallest and it could lose its No. 2 slot to Orange in the UK."
Mount said BT should be more radical and consider merging "with the likes of Telefonica Moviles (of Spain) and KPM Mobile (of the Netherlands)."
cnnfn.cnn.com |
