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Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Teresa Lo who wrote (5800)	2/23/2001 2:50:34 AM
From: Teresa Lo	Read Replies (3) \| Respond to of 8925

<font color=red>2001 Feb 23 Market Analysis & Commentary: Market Analysis and Commentary for Friday, February 23, 2001 DOH! Signs of Life? The headlines in the financial media are laughable. In tonight’s Wall Street Journal, this is what we read: “The bear that mauled the NASDAQ Composite Index has the broader market in its sights now. After another jittery day on Wall Street, the Standard & Poor's 500-stock index finished just slightly lower, but it stands perilously close to dropping into "bear market" territory, or 20% off its high. It would be the index's first bear market, under that definition, since 1990. The index is now down 18% from its record close set March 24 of last year. This means that for the first time in 10 years, the broad stock market, not just the technology stocks that dominate NASDAQ, could slip into a bear market.” = Commentary = Journalism of this type is a complete waste of space. The writers are always looking in the rear view mirror. Remember I said that they would not panic until the low was broken? Here we are. What can I say? The financial world is all together too predictable. Sun Microsystems came out after the market to warn that they were not going to make it: “Sun Microsystems Inc. became the latest casualty of a slowing U.S. economy, warning that profit in the current quarter could be as little as half what Wall Street expected thanks to a sharp falloff in U.S. information-technology spending. Michael Lehman, Sun's chief financial officer, said that the Palo Alto, Calif., computer maker now expects earnings from operations of between seven cents and nine cents a diluted share for its fiscal third quarter ending in March. Analysts surveyed by First Call/Thomson Financial had expected Sun to post earnings of 15 cents a share for that period.” It is interesting to see that at presstime, 2:45AM Eastern, the NASDAQ futures are trading up a tad. What? Going up on bad news? That would be a sign of change in sentiment. Perhaps the market is washed-out? On another, most interesting note, is my conversation with my sister last night. She is not a trader. In fact, she believes in buying for the long haul, “diversification” and all the other old bull market buzzwords and concepts. She thinks that all of my trading adventures are just plain silly. This is why she is such a good indicator, as is my best friend, a lady who somehow always buys the top tick and sells at the low. It’s amazing! I called to see how my sister and her family were doing. They have a little son, a few months older than my son Brandon, who just turned three months yesterday, and is weighing in at 14 pounds. Can’t even tell that he was ever five weeks premature anymore. But I digress… The first thing my sister asked was not “how are you” or even “how is Brandon”, but “how much lower can the market go?” There you have it again. All the while, since the September 2000 failed test of the swing high of the bounce from May 2000 low, people have been asking me, for the last two thousand points down on the NASDAQ 100 Index: “Is this the bottom?” Now that we have tested a most important bottom and broken it by a tad, all they can say is “how low can it go??????" Bizarre, but at the same time, we know this is capitulation thinking. They probably puked big time this morning and now, we see signs of life amongst the ashes. The only question left here is, assuming the bounce that started yesterday continues, will it be a failing one? On the daily chart of the NDX, we see here a hammer formed on test of the old low. Most people would interpret that as “the game is on again”, particularly in light of the fact that the market did not explode upon the Sun announcement, but we have to ask ourselves, what would be the most diabolical scenario that this chart can paint? ottographs.com For as long as I can remember, well certainly going back to 1996 when the parabolic advance truly began, every one of these tests of an old important low held until the year 2000, and one wonders if this new pattern will re-assert itself again this time. For now, with the intraday (45-minute) S&P and NASDAQ futures having made a higher low in yesterday’s trading, we’ll let it bounce, and see how many days it can hold. Teresa