Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (70492)	2/26/2001 12:55:05 PM
From: Les H	Read Replies (1) \| Respond to of 99985

MARKET EARNINGS The chances of a V shape recovery seem to be evaporating. The new view of a cup shape recovery is more likely but how long will we bump along the bottom? The earnings growth of 4.0% based on the 93% of the S&P 500 having reported will fall somewhat as the remaining 7% report. The final number will be something between 3 and 4% growth. There will be only 15 companies left to report after this week. 2 of those are utilities, Edison Intl and PG&E, which have indicated they have no idea when they will be able to report quarterly results. If you think that all the bad news is out, take a look at the warnings data for 1Q01. Compared to the warnings at the same point in 4Q00, the 1Q01 warnings are up 43%. And 4Q00 warnings, currently at 792, have already shattered the previous 554 high for warnings in 4Q98. Even more ominous is that 1Q01 tech sector warnings are up 97% from the 4Q00 record setting pace. The market has written off 1Q01 and 2Q01 earnings. The current 1Q01 estimated decline of 3.2% for S&P500 earnings will likely end up at a decline of 4 or 5%. The current 1.4% decline for 2Q01 will likely fall to a 5% to 10% decline by July. Optimism for the second half recovery is starting to wane as analysts continue to take down 3Q01 and 4Q01 expectations. Companies have said they have little or no visibility beyond 1Q01. At present, the 6.1% earnings growth estimate for 3Q01 supports the 3Q01 upturn thesis. But the problem is the lack of visibility for 3Q01 earnings. If the current rate of analyst reductions continues, we could very well end up under water in 3Q01 as well. Technology earnings continue to plummet. This week's warnings out of Agilent, Sun Micro, Brocade, and Motorola add to a prominent list of who is who. Just to refresh your memory here are some of the headliners to issue negative guidance for 1Q01: Dell, Nortel, Cisco, Applied Materials, Nokia, Corning, Texas Instruments, Microsoft, Intel, and Yahoo. Only a select few analysts have thrown in the towel for the year, but the tide might be shifting. The worry remains that, given the sharp drops in tech earnings, that the problems for earnings may be more than just the weak economy. With earnings expectations for the full 2001 year down to 4.8%, it now seems highly probable that, even if the earnings recovery does start in 3Q01 and continue in 4Q01, it will not be enough to offset the declines in 1Q01 and 2Q01. Expectations for the technology sector for the full year are already at a 5% decline, while communications services are at a 13% decline, basic materials at a 11% decline, and consumer cyclicals at a 2% decline. thomsoninvest.net

To: Les H who wrote (70492)	2/26/2001 2:07:46 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 99985

Note that Angell cited weak gold as a reason why the Fed should get more aggressive. Bad news for the gold shorts to put it mildly.

To: Les H who wrote (70492)	2/26/2001 11:14:17 PM
From: Les H	Respond to of 99985

WHAT TO EXPECT NOW. February 26, 2001 Ord Oracle. The "5 day ARMS", "Percent Volume indicator" and the downtick readings last Friday gave bullish short-term signals. Therefore, we are expecting a bounce on the S&P's. This potential bounce should take the market up to fill the gap at the 1335 area on the March S&P's. "Gaps" are like magnets to the market and once they get to the "Gap" area, they turn into resistance. The bigger the gap the strong the resistance to get through it. The Gap at the 1335 area is very big and we do not expect the market to get thought the first time. The uptick readings have been running into extreme levels hitting a high today of over 1000. This condition implies the market is burning up fuel fast and an extended rally is not probable. We were long the SPY on Friday but our stop was to close and was hit later in the day. We are not chasing after this market for now. There is a cycle high due on Wednesday and we think we will get another chance to buy near the recent lows. Flat for now. We are long the QQQ on Friday at 50.25 with a stop at 47.90. Our upside target is the 58 to 59 level, which is, were a gap is left open between last Thursday and Friday. We expect the market will fill the gap and stop. There is a good chance the QQQ may pull back from the gap area and test the current lows once more. We are holding long the QQQ with a target near the 58 to 59 levels. We are bullish on gold. Wave "1" up was the October 1999 rally. Wave "2" down may have ended at the February 16 low. Wave "3" up has begun. marketweb.com