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Non-Tech : NOTES -- Ignore unavailable to you. Want to Upgrade?

To: Didi who wrote (641)	3/9/2001 11:47:23 PM
From: Jack Hartmann	Read Replies (1) \| Respond to of 2505

Cherny on the decline biz.yahoo.com Edited Nasdaq Composite index flirts with key 2,000 level By Brad Schade CHICAGO, March 9 (Reuters) - The Nasdaq Composite stock index (^IXIC - news) is nearing a key psychological juncture at the 2,000 level almost a year to the week after reaching its all-time high of 5,132, but technicians said that level may offer only temporary support as the index heads for deeper losses. Gregory Nie, technical analyst at First Union Securities Inc. also noted that a long-term trendline dating back to 1994 on weekly charts currently comes in at about 2000. ``If we go below that there is major long-term damage,'' Nie said, adding that two areas of support after that level is broken will be in the 1,800 to 1,900 area and again between the 1,500 to 1,700 levels, dating from late 1997 and early 1998. ``We have in place the exact opposite of a bull trend,'' said Paul Cherney, market analyst at Standard and Poor's MMS. ``The mantra for so many years, from 1995 up until the beginning of 2000, was 'buy the dip.' Well now it's exactly the opposite -- it's sell the rally. None of the rallies we get are able to generate follow-through .'' The ``dead cat bounce'' of the last week, in which the Nasdaq had run out of sellers and moved higher from a deeply oversold position, did little to alleviate the overextended condition of the market, technicians said. ``We're still oversold and trying to work off that oversold condition,'' said Todd Gold, vice president of technical research at Gruntal & Co. He said investors who saw last week's recovery as a possible bottom and a buying opportunity may actually be extending the decline. ``Bottom callers are actually harming the market more because you're seeing retail investors and some institutional investors jump into some of these stocks with a long-term horizon in mind and they're doing it too early,'' Gold said. ``That's actually aiding the downward momentum because those people join in when we have a panic selloff like this,'' he said. Gold said the Nasdaq is still firmly entrenched in a downtrend and the 1,800 level ``is more of a target than support.'' The 1,800 level represents the breakout point in December 1998, when the then advancing Nasdaq Composite broke above the prior high from July of that year, Gold said. But even deeper losses could be in store. ``We've broken under what most people thought was a firm bottom at 2,251, which was the low of January 3,'' Kashyap said. Breaking that support level projects a nominal move downward equivalent to the move from the initial low to the peak, meaning a fall to near the 1,600 level, he said. To avert such a decline, Kashyap said, the index would need to move back up above the February 26 high of about 2,310. ``That would give us a short-term bottom, projecting a move back up to 2,600 to 2,700,'' he said. Cherney also is looking for other technical signs that would indicate capitulation on the part of bears, including volume of 2.3 billion shares on Nasdaq, and a Chicago Board Options Exchange individual equity option put/call ratio of 0.75 and a total CBOE put/call ratio of 0.99. Cherney said the equity put/call ratio was at 0.76 just before the close on Friday, but Nasdaq volume was just under two billion shares. ************************ Hope you are OK Di. Jack