I am no e-waver and only know enough to be dangerous. I don't track the NASDAQ as much as the NDX. I feel the NASDAQ has lost much of what started it in teh beginning since now it is full of REITs, Bond fund Trusts etc and no longer is primarily techs and Biotechs.
Here is what I said on the subject at the CFZ thread though and some articles I filtered out of SI thus far....
From: Lee Lichterman III Saturday, Apr 14, 2001 7:54 AM
View Replies (1) | Respond to of 94070
I am no e-waver so this may be all wrong but my read on the drop was an minor ABC in a Big wave one down from March to May, then another ABC in a Big wave 2 from May to September, then we just finished a ABC Wave 3 down from September to April 4 and we are now starting a wave 4 counter trend rally that will take us to around 2200 NDx before a crash wave 5 down to new lows. My bottom target is around 1060 but remote possibility of 800 area.
I stared and stared and I just dont see 5 waves down from September to April. Why can't we have all ABCs for the minor moves within the bigger move? Again, I am no E-waver but the ABCs are a lot easier to see.
Good Luck,
Lee ( L3_aka_L3)
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From: Lee Lichterman III Saturday, Apr 14, 2001
>>To answer your question, you can not have a-b-c's pushing a move. Motive/inpulse waves are what drive a trend and they are normally 5's. Corrective waves against the larger trend (the one referred to as "of higher degree") move in 3's.<<
As I said, I am no e-waver but I like the basic concept.
My problem with the Wave 3 move down from September to April is I count either 3 waves or 7, I don't see 5 anywhere.
Feb to April was shorter than September to Feb so we couldn't have just finished a minor 3 for another 5 within this move so I assume this big wave three must be finished.
A seven count would be Sept 1 to Oct 11, 2 to Nov 6th, 3 to Nov th, 4 to Dec 11th, 5 Jan 2nd, 6 Jan 25th, and 7 Apr 4th.
The ABC I like is A Sept 1 to Jan 2, B to Jan 25 and then C to April 4th. Nice and clean.
Which of the 7 other wave possibilities do you cut out to get 5?
Good Luck,
Lee
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This discussion has gone to P-mail and I haven't received a reply yet. With his permission, I will post his reply later.
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Anyone want to buy CSCO equipment cheap? WOW!!! No shortage of used equipment.....
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From: ild Friday, Apr 13, 2001 4:24 PM
View Replies (2) | Respond to of 94062
DANCING IN THE DARK
by Fred Hickey 07:00 AM 04|13|2001
Ignore all those Wall Street 'visionaries' who claim to know where the market, the economy and tech stocks are heading. Call it the "Cloudy Vision Thing."
"He who can see three days ahead will be rich for three thousand years." This old Japanese proverb should be kept in mind when considering the great ongoing debate about where the stock market, the economy and tech stocks are now heading.
The visionaries employed by the powerful Wall Street institutions are out in full force, declaring that they can now "see" a stock market bottom. Merrill Lynch is running a massive print campaign with full-page ads claiming that the markets "are now close to a bottom." Goldman Sachs trotted out . . . Abby Joseph Cohen last month to urge everyone to buy, raising her recommended stock allocation to 70% (from 65%). Credit Suisse First Boston has Tom Galvin proclaiming (once again) that this is the best buying opportunity in years.
Seemingly, whenever I turn on CNBC (as infrequently as possible), I see another Wall Street tout asserting that the stock market is at, or near, a bottom. A recent Reuters poll of 13 top Wall Street strategists found that they, on average, expected the Dow Jones Industrial Average to rise 33% by year's end; the S&P 500 Index to jump 40%, and the Nasdaq Composite Index to soar 80%.
Here's another proverb: "He who believes that most Wall Street market strategists can see three days ahead will be poor for three thousand years" -- Fred Hickey 4/02/2001.
This proverb has been proven true too many times in recent months.
In my world of technology, Wall Street's experts are called analysts. A year ago, these prophets forecast that PC sales would boom due to a post-Y2K corporate buying binge and a new upgrade cycle led by mass Windows 2000 implementations. Telecom analysts predicted that cell phone sales would hit 650 million units in 2001. Network equipment analysts projected shortages of optical equipment until eternity. Semiconductor sales were supposed to surge another 30%+ in 2001, led by DRAMS, which were expected to be in acute shortage by Q4 2000.
Of course, we now know that DRAM prices have plunged nearly 70% in six months due to a supply glut; semiconductor sales are dropping by double-digit percentage rates; cell phone sales are now estimated (by the cell phone manufacturers) at 450 million units; optical networking equipment is mired in a horrible glut, and PC unit sales growth is nonexistent (at best).
Once it became apparent to tech analysts late last year that their rosy forecasts were, shall we say, somewhat off, the analyst community proclaimed the problem to be a short-term inventory correction, and [said] that the inventory would be worked off by Q1, or Q2 at the latest. That forecast also turned out to be wrong, and now the end of the inventory correction is seen in Q3 or Q4, at the latest.
Ironically, while Wall Street claims to see a bottom in the stock market and the analysts see an end to the technology "inventory correction" (therefore, tech stocks should be bought now), tech industry leaders have never had less visibility. The number of this quarter's preannouncements due to missed forecasts is smashing the old record (set in Q4) by a factor of almost two. Some companies have preannounced two or three times in the quarter, as business plunged at an ever-accelerating pace. While most market strategists, chart technicians and analysts are proclaiming in unison that they see a "bottom," the CEOs' most-used phrase today is "no visibility." The only bottom they see is the bottomless pit they're staring into.
No Visibility in Network Infrastructure
Henry Nicholas, Broadcom CEO (and near-terminal optimist), recently stated, after preannouncing for the second time in the quarter, "We don't have the visibility to be able to predict when this softness will abate." LSI Logic, another semiconductor supplier to the communications industry, claimed, "We don't have the visibility now to say when we'll see strong growth again, and we obviously doubt that anyone does."
Corning, a leading producer of optical fiber and components, preannounced two times within a month (February 26 and March 19). With the second preannouncement, Corning's CEO admitted: "We have reduced visibility about when the market is going to bounce back," and "the current slowdown appears to be extending out longer than expected." JDS Uniphase doesn't have any visibility. The company lowered earnings expectations three times in just six weeks.
PMC Sierra now expects a nearly 50% Q1 revenue plunge from Q4. PMC Sierra CEO Bob Bailey cited order cancellations from its customers as the culprit. According to Bailey, "Several of our customers have basically a net booking of close to zero this quarter." PMC Sierra supplies to almost all the major communications equipment makers, including Cisco, Lucent and Nortel.
PMC customers like Nortel keep cutting forecasts. After preannouncing in mid-February, Nortel warned again last week, this time predicting a loss for the first quarter. Nortel dropped its full-year forecast, citing "the poor visibility into the duration and breadth of the economic downturn. Week by week, the downturn continues to proceed -- it hasn't stabilized," said Nortel CEO John Roth. Roth also admitted, "We're seeing some symptoms of a downturn in Europe. We're cautious about Europe at this time." Nortel upped its expected job cutbacks from 10,000 to 15,000.
No Visibility in Computers
Hewlett-Packard CEO Carly Fiorina stated in Europe recently, "I'm not optimistic about recovery in the second half of this year. This slowdown is now clearly spreading to other parts of the world. Candidly, I'm not optimistic about Europe's immunity," Fiorina said. Sun Microsystems' CEO, Scott McNealy, told a TV interviewer that he basically had "no visibility" at this time. Sun last month cut its profit projection for Q1 in half, blaming an unprecedented fast reduction in orders for Sun's computer servers, which power corporate networks and Internet operations.
Intel CFO Andy Bryant admitted that demand had fallen for nearly all of Intel's products -- PC processors, networking chips and flash memory chips. Demand was weak in all geographies, and chips for servers dropped by even more than desktop PC chips. The server business had been holding up better than PCs prior to this year. Bryant also noted, "I don't see any sign of recovery yet. Nothing inspires a lot of hope." Intel Chaiman Andy Grove stated recently, "I don't expect the end demand to snap back. We are in this state for some period of time."
There's also a visibility problem in the computer software industry. SAP, Europe's largest software company, didn't have enough visibility to comment on the second-half outlook due to the uncertain global economic conditions. Leading U.S. software vendor, Oracle, lowered forecasts for the coming quarter, but could not give guidance for the second half of this year. Oracle's CFO, Jeff Henley, told analysts, "I haven't a clue what will happen."
Visibility for the pure Internet software providers? Forget about it.
Fred Hickey is editor of The High-Tech Strategist. A version of this story first appeared in the April 2, 2001, issue of that publication.
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From: patron_anejo_por_favor Friday, Apr 13, 2001 6:48 PM
View Replies (4) | Respond to of 94067
Hi, my name is Bob, and I'm a clown...
globeandmail.com.
POSTED AT 12:03 AM EDT Friday, April 13
Some tech investors need to join a 12-step
program
By MATHEW INGRAM
Globe and Mail Update
Like an alcoholic after another all-night
bender, there were plenty of tech investors
who sat with their head in their hands a
month or so ago, looking at benchmark
Nasdaq stocks 80 to 90 per cent off their
highs. They swore that they would never,
ever do that again — never again would
they be so foolish as to binge on such questionable investments. So why do
so many tech investors seem to be falling off the wagon so quickly?
Maybe more direct action was required. Maybe, after the meltdown of the
Nasdaq was well under way, technology investors should have been forced
to sign something before they were allowed to buy more stocks — the kind
of document that Robert Downey Jr. has to sign when he gets released
every six months or so from some treatment program or other.
How about something like: "I agree never to buy something with no
earnings and a price-to-sales ratio of more than 10"; "I will never justify
such multiples by projecting where earnings and revenue might be three
years from now, when a company has only existed for two years"; "I
promise I won't believe a company when they stick to their forecasts, even
though everyone else in the sector has slashed theirs by over 50 per cent."
Investors could agree to stay away from discount brokerage Web sites for
at least two days after reading about a company's quarterly results, and to
agree never to look at analysts' ratings without a neutral third party being
present. Furthermore, they could promise not to think about what they paid
for some of those big losers, or to hope that they will ever get back there, or
to use the word "bottom" in reference to the Nasdaq — and to write an
essay about how not to fall for a "short-covering" rally.
Binge drinkers get suckered into returning to their old ways even though
they know that they will only cause pain and misery, and it looks as though
some tech investors have the same approach when it comes to stocks like
Yahoo, Amazon, Juniper Networks and Research In Motion. They have
been beaten up so badly by an unrelenting stream of bad news and earnings
warnings that having a company merely meet its already-reduced estimates
is reason for joy. A lack of bad news is greeted as though it was good
news.
Juniper and Research In Motion, two stocks that continue to trade at
eye-popping multiples despite the economic downturn and signs of a slump
in their respective markets, soared higher and pulled the rest of the Nasdaq
with them Thursday. Juniper released results that met analysts'
expectations, but it also cut its forecasts for the year — and the stock
climbed more than 17 per cent, even though it is already 100 times trailing
earnings and more than 50 times estimates for the current year.
Research In Motion actually outperformed estimates for both earnings and
revenue, although its earnings came largely from investment gains (that is,
selling shares in other companies). Revenue soared thanks to sales of its
handhelds to customers such as America Online, but most of the analysts
who upgraded the stock failed to mention that the growth in RIM's
subscriber base — which makes up the bulk of its recurring revenue — fell
about 20 per cent below targets. The stock climbed more than 28 per cent
and is now trading for more than 50 times even the recently upgraded
earnings forecasts for 2001.
The list goes on: Dell and Yahoo pushed the market up by more than 5 per
cent last week when they said that things are going to be almost exactly as
bad as expected. Dell climbed more than 14 per cent last Thursday, even
though all the company said was that it was sticking by its forecasts. The
stock is now trading at more than 35 times earnings estimates, despite the
fact that its profit margins are still falling. Yahoo climbed almost 25 per cent
after it was upgraded to a "buy" by a Lehman Brothers analyst, even
though questions remain about its business and it needs a CEO.
Motorola pulled an even better trick this week: it reported a quarterly loss
for the first time in 15 years, said its cellphone handset business is in serious
trouble and it will have to lay off thousands of employees — and the stock
has climbed to the point where it is now 16 per cent higher than it was just
before the company released its results. Revenue in a couple of its major
markets fell by over 25 per cent over last year, and yet the stock is now
trading at 92 times projected earnings.
Just because some analysts argue that the Nasdaq is getting close to a
bottom, and some economists think the U.S. will see a pickup in activity
toward the end of the year doesn't mean it's time to start partying again. |
