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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (43161)	3/5/2001 9:49:34 PM
From: 16yearcycle	Read Replies (1) \| Respond to of 70976

"You chose the 200Week Moving Average for AMAT, because that is the MA where the stock bounced when it was out of favor in earlier years" Naw, the whole argument is messed up, J, because a friend taught me about the 200 week only breaking down in a long term bear market, and I learned this about 15 years ago. I apply it as a long term support level: stockcharts.com[w,a]wbolnymy[pb50!b200!b!b!f][vc60][iUc20!Ua12,26,9!Lb14!Lf!Lg!Lj[$spx]] See how the index held in 1998? It did it many times before too. I bought like hell at that moment in 1998 because of that indicator. Notice that it didn't hold this time. So we are either in serious long term trouble, or we have overreacted and this will adjust over many months and then be a useful indicator again. We'll see. I have other reasons for buying amat at around 40, and it has to do with reasons posted here already this weekend: we have very likely now achieved a level where downwards momentum in business has started to stall, ie, we have been in a nose dive in the chip equip and networking equip area for several months, and the momentum has achieved peak velocity. At peak velocity, it is time to buy, just as at the absolute momentum peak on the upside it is time to sell. This is the way the street works. Blow the pe's up at growth peaks and crush them when growth slows. Create huge swings in volatility, huge differences in valuations. Oh, there is a proper way to value a business, but how can the Street make money if all that happens is adjustments along the way based on quarterly reports? That won't do. Drive the price down baby; and then bring down the estimates. The estimates must be off because the price is down, right? Then drive the price up. Send out the sales staff. Get as many folks in as you can. Drive the estimates up, expand the pe. Drive it back down. And so on.