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

To: Lee Lichterman III who wrote (1895)	3/3/2001 4:02:23 PM
From: Lee Lichterman III	Read Replies (3) \| Respond to of 52237

By L3_Aka_L3 on Saturday, March 03, 2001 - 01:40 pm: Edit I always say there is no fear in the market and I just want to announce that I personally now have enough fear for the whole market all by myself. -ggg- I just finished updating the charts on the site and while I haven't even begun to run my other charts yet, I have never seen worse looking weekly candle charts in my life. If I didn't know we were so over sold and that we have already come down so far, I would say that we are about to crash. Looking at some long term charts, I still have NASDAQ 1500 as an ultimate target but due to weighting and the way some of the lines are converging, I am now targeting NDX 1100 as the ultimate low. That would be about 28 in the QQQ. SCARY! I am not saying necessarily on this push down but before the ultimate bottom. There are some fundamentals that point a bit higher as I highlighted in Greenspans testimony on our reference/Fed board about how the long term growth rate was 1%ish, yet from 95 on we were in hyper growth which was unsustainable. He now thinks we will split the difference from now on and average about 2.5% which would equate to about 1500 NDX but that is FA and doesn't help much with short term targets or movement. What really concerned me about his testimony yesterday was his statement when questioned about rate cuts, Greenspan said, "I hope I was sufficiently ambiguous not to have indicated timing of when or if we would move. I hope I was adept at what we term 'Fedspeak' on that issue." Is AG afraid he has used up most of his bullets, fears that he is approaching the "pushing on a string" scenario so now just wants to be able to NOT cut the rate and keep the street guessing so he can hold it over the shorts heads? I doubt it is working since the COT report shows 102,000 commercial "smart money" shorts now with only small guys taking the other side. Commercial Shorts are NOT covering and are instead still adding shorts! Meanwhile Mutual FUnds are seeing record redemptions which pulls potential bounce money away. We are so over sold it is unbelievable yet I look back at some old posts of mine about what these companies are really worth based on FA and realize we aren't even close to fair value yet much less over sold. This is where it gets tough trying to decide if one should follow technicals or Fundamentals. Don and I talked about this at length last night and while we both feel technically we are near bottom, there is a lot of disturbing FA that says we are not. AG can not really cut rates too fast as there is no real slowdown showing up anywhere other than bubble tech earnings. Job growth is still strong, consumers while saying they are worried are still racking up credit at record pace and the only people losing money in the market are the bubble head traders that thought all these tech stocks were really worth 200 years or 1000 years worth of earnings despite no dividends and an unsustainable rate of growth that would have required profits larger than the entire GDP of the planet. These are the same people blaming Greenspan for causing this wreck instead of realizing that we would have crashed from higher levels had this been allowed to continue much longer. Don and I both were looking at various things pointing to the realization that Greenspan really could pull off a soft landing here. I find this amazing and with the 4.2 unemployment rate Friday, we could coast right into the desired 4.5% easily. Perma Bulls may not like the short term pain but this is actually looking like the cleansing that was needed for a healthy long term economy. Anyway, I think time wise we are nearing a low as my cycles all are pointing to this month being a turn point. My shortened mid term cycle hit Friday, I have a longer term cycle pointing to late March and a yet longer term coombined index cycle that points to late March/early April ( tough to tell this early) as a turn. My main economic big cycle turn is still pointing all the way out to September though so I don't expect the actual Bear to end before then. My outlook USING ONLY CYCLE turns is as follows. Down to flat through expiration 17 March, then up in a counter trend rally. One last turn down that really cleans our clocks ending in September. From there I suspect we will find our trading range and oscillate for a long long time before even attempting anything that resembles the old bull market. This down turn is longer, more drawn out and steeper than anything we have had in recent history. This is NOT 90, 87, 73 etc. This is closer to but not quite as bad as 1929, Japan circa 1990 etc. We will not be attacking NASDAQ 5000 in the next year etc. Using only PEG ratio, we are still over valued and growth is slowing. I would look at DOW 9-10K and apply 2 1/2% growth to figure targets. As for the NASDAQ or NDX, I would look for 1500 then apply maybe 15%. Recall that MSFT is now around 8% of the NDX weighting and their court cases still haven't started in the state run lawsuits. Look to the history of IBM and their 10 year circus with litigation while MSFT ate their lunch due to distraction. I do think we will hit bottom soon and if we do have a hard down day, I would probably look to buy the second day or possibly even dip a bit into the abyss depending on how it looked. Mid term, I think we will have to double bottom simply due to what Don mentions about declines of over 7% historically. Longer term, those with 15-20 year outlooks, heck anywhere in here is probably a good place to start looking for bargains. I think our economy will pull out of this OK and it won't be a Japan or 29 economy, but I do think we were that over valued and the prices will get hit hard a bit longer to correct the excess. It all comes down to what your time tables are and finding who will survive. Well I didn't mean to write a novel and my kids are raising hell in the background so I will cut this off and study the charts later to get better short term guidance. Basically things don't look great but those with a longer term outlook might want to start gettign their shopping list together. We will get a counter trend rally soon to reshort, avergae some losses and get out again etc but then we should get one last good flush to clean out the last of the specualtors. After that, we might actually be able to inverst instead of trade for the first time on many years. For anyone thinking Firday mid day's bounce was for real, I highly encourage looking at the TRIN and TRIN.NQ on quote.com. The tickers are STI.N and STI.O on Yahoo. TRIN showed that the big money was selling into that rally all day so the drop later was a cinch. Real bounces have TRIN under .8 Good Luck, Lee