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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Rande Is who wrote (49289)	3/17/2001 6:50:02 AM
From: DlphcOracl	Read Replies (2) \| Respond to of 57584

Rande Is: I think your post is on the right track but the timing is off. As bad as things are, the worst is yet to come. I went 100% cash in mid-February because the Dow began to experience weakness. My gut feeling was that the "tech wreck" was about to spread the the Dow and the general market, converting the bursting of the tech and internet bubble into an authentic bear market. The Dow (IMO) will continue to fall toward the 9000 level and the remainder of the market will remain weak between now and April 15th. I believe the Fed will cut interest rates by "only" .50 points, resulting in disappointment and further selling. Additionally, the weeks leading up to the income tax deadline have been quite weak for the past three years. It will probably be even more so this year. The small investor is finally beginning to realize that many of the tech stocks they have ridden to the bottom will not bounce back (or, if they do, it will take several years). They will be selling these stocks as "losers" to pay taxes, generating tax losses for next year or later this year. The tech stocks will see continued pressure over the next month, bringing the NASDAQ down to 1800, possibly 1600-1650. I remain on the sidelines until the NASDAQ either approaches 1600 or shows some signs of stability. At 1600-1650, I don't care what the technicals or the market sentiment is -- I will be aggressively be buying the QQQ's using the leveraged Pro Funds Ultra OTC (UOPIX) fund, which doubles the NASDAQ 100 QQQ's movement, as a LT holding for the next 1-3 years. My point: it is still too early to re-enter the techs. However, this will be the winning strategy after the next earnings season and tax deadline are out of the way. Money will not be made in the defensive sectors that have become the analysts' darlings, which are now richly valued.

To: Rande Is who wrote (49289)	3/17/2001 4:44:18 PM
From: Mark Konrad	Read Replies (2) \| Respond to of 57584

Brokerage Office Revisited: Rande, I think there is a fair amount of validity to your comments regarding the tech bear spreading to the DOW. The calendar is especially relevant now: the general "non-investing" public are preparing and filing their tax returns and beginning to see large declines on their monthly IRA, KEOGH, 401k, etc., statements. After hearing day after day about the burst tech bubble, steady declines in the Nasdaq since September, and (most importantly) actual job layoffs, real concern and maybe some panic are beginning to set in. A couple of weeks ago I was at NBC Studios in Burbank and saw an affluent exec watching CNBC and moaning about another relatively small drop in GE (which owns NBC). He gravely told me that a lot of employees have most of their savings in GE and lost a lot of money recently (down about 30% since its Oct high, down 17% this month alone). When I mentioned much larger drops in CSCO, JDSU and others he shrugged his shoulders, "Don't know about them." Obviously he doesn't own CSCO, etc. This real "heard on the street" may indicate the bulk of pure tech selling is largely behind us but that a new wave of "old economy" stock selling is happening now and more may lie ahead...something consistent with your comments. A large component of an eventual recovery, which I've mentioned before but frequently fail to heed myself, is TIME. TIME is every bit as withering as price declines, it allows the mind and body to become exhausted, discouraged, and ultimately even bored enough to simply give up and say the game is over. CSCO doesn't have to spike down to 10 or the Q's to 20 (though anything's possible) for final capitulation. They only have to languish at or around current levels long enough to discourage more perma-bulls. This may take longer and cause more bottoming activity than I had hoped....maybe a month, two, six or twelve. It took 2-3 years for the market to completely bottom after October, 1929. Time is my enemy: every brief one or two-day rally gets me excited, tempts me to chase the "movers" to avoid being left behind. Every one or two-day collapse discourages me and tempts me to sell everything before it gets to zero. Both temptations are emotional and irrational (but are great for disciplined daytraders). If I use my head, my charts and history books, the following is a far more logical and sensible investment outlook: Time is my friend. It allows me to work and save and buy more CSCO, for example, at 20 or less without hurry. My future family will be thrilled. Those who were able to scale in tech buys in the early 30's made fortunes, as did those during other, more recent, steep declines. Though I don't play golf (still an "old man's sport" to me) I can imagine being on the course someday and remarking that I bought some CSCO at 20, 18, 15, whatever, and put my kids through college with it. Or JDSU or LPTH or.... My outlook changes significantly if we're talking about daytrading and even position trading. Every point counts and can count a lot. My current strategy, fwiw, is to continue position trading but to begin NOW to build new longer-term holds with an outlook of 6-18 months or more. These will be minor positions but will be impervious to daily or weekly swings (barring a family emergency, of course). They will include most of our favorite high-fliers and a few of my pets, as well. I will scale in these buys on a weekly basis over the next 3-6 months as finances permit. All the above is my opinion only. Just some rambling thoughts on this beautiful and sunny Saturday. Regards, Mark Konrad

To: Rande Is who wrote (49289)	3/17/2001 6:58:28 PM
From: rocklobster	Respond to of 57584

Rande Re 4DML, It now appears that we are definitely in the midst of a 4DML. Large gap up Thursday that closed on the low.. continued downward pressure Friday.. Indicating a low on Tuesday.. unless it turns into a compounded 4DML. If Tuesday gaps up and sells down to the lows at the close, we could see a compounded 4DML. Yikes.. I will be focusing heavily on shorts on monday and tuesday, and if the compounde scenario plays out then it will be shorts the rest of next week check out these posts about margin debt..from the stock attack thread..I realize they are anecdotal, but some big players are getting hit. A lot of people are still margined to the hilt long. Message 15517802 Message 15518125 Message 15519169 Message 15519268 And perhaps this is the most freightening one of all about how commercials have just started loading the boat on nasdaq puts while lightening their s&p put positions. Message 15520904 Keep up the good work protecting investors Rande, and don't let rose colored shades prevent you from seeing the bottomless trend that we are still in. could easily see 50% downside from here on nazdaq..markets go to extremes in both directions dont they? I wouldn't be advocating buying nasdaq stocks or any stocks as long term investments right now, or even going long for a position trading pop.. better to miss a little upside than get hit another 50%.. Remember a 50% decline from here would require people to see a 100% appreciation just to get back to even..better to let the market stabalize. just trying to help others avoid the catastropic losses that I have endured. rok