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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 (2556)	3/12/2001 11:41:32 AM
From: Lee Lichterman III	Respond to of 52237

As I said before, I think we are nearing a short term bottom soon. I don't think we are quite there yet and I am targeting 42 to 37 for that low on the QQQ and won't put my kids in until around 40 unless I see signs of a bottom but there are hints that we are getting close. I talked to my broker this morning and margin calls are going out all over. I read on SI from a broker that posts there that margin calls this time are going out to people who always met them before, this time they are not. I also said a loong time ago that the bottom wouldn't come until the last of the mania stocks like QCOM came down. QCOM and a few others are finally breaking down today. GLW is getting closer to my 22 target, CSCO is finally in teh teens, JNPR is sub 50, EMC has almost fulfilled the H&S and most important of all, GE is finally falling hard. We are getting close! I did put in some low ball bids to cover my short positions but won't be adding longs quite yet. I am just going to see if I can cover some of my short call positions. That will in effect make me slightly long if the bids are hit and I end up covering. Some news from abroad.... 10:09 AM JAPAN TALK According to Bloomberg News, Asia Pulp & Paper Co. (a company based in Singapore and throughout Asia--except Japan), said it will stop servicing its $12 Bln of debt obligations. The company said that it would "immediately cease payment of interest and principal on all holding company debt and on debt issued by our subsidiaries and affilates." The company's chief financial officer said that "The sharp drop in pulp and paper prices, reduction of available lines of credit for working capital, combined with rising costs for Indonesian corporates have significantly impacted our business and our cash position." This news may have helped the short-end of the U.S. Treasury yield curve where odds of either an early rate cut or a 75 basis point cut at next week's meeting rose from under 10% to nearly 30% moments ago. 10:05 AM COMMODITY TALK: Crude oil prices are down about 0.9% this morning as the market continues to debate the size of OPEC output cuts. OPEC meets on Friday and most believe the group will cut output by 500,000 to 1 million barrels/day. Still, oil prices are down for the third consecutive session. The Middle East Economic Survey reports that OPEC officials will need to contend with the fact that Iraqi crude production has been slowly rising (1.9 million barrels/day in Feb. vs. 1.7 million in Jan. and 1.2 million in Dec.). The report also notes that OPEC will need to factor in about 450,000 barrels/day of overproduction. Such factors have left the oil market somewhat confused about both the size and impact of OPEC production cuts. But prices are expected to rise going forward, based on the fact that NYMEX futures contracts are in contango through June, with prices rising from the April and May contracts. Heating oil and natural gas are also off modestly today. The CRB commodity index is down for the third consecutive session, off about 0.25% today, and is at its lowest level since Feb. 28. 09:42 AM JAPAN TALK One trading strategy that market participants have seen in recent days is the return of the so-called yen carry trade. This trade entails selling yen for dollars and using the dollars to buy Treasuries. The strategy benefits from both the interest rate differential between Japanese securities (where 2-year notes yield an incredibly low 0.18%) and Treasuries, and from a decline in the yen (dollar rising, yen falling). Volatility in the currency is generally responsible for the biggest portion of the profit and loss. Some market participants believe that the yen might soon fall owing to Japan's economic distress and or a deliberate attempt by Japanese officials to weaken the yen in order to stimulate exports. But Japan has been opposed to this policy in the past as it puts additional strains on Japanese companies that have debts denominated in foreign currencies. With balance sheets already stretched, the benefits of a weaker yen are dwarfed by the additional strain that it would put on their balance sheets. But then again, a seriously weak yen would open the floodgates for capital inflows and this would likely mean that debt burdens would change hands and therefore help their financial system