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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: JOHN W. who wrote (80909)	7/27/2001 12:02:50 AM
From: t2	Read Replies (2) \| Respond to of 99985

More information on Nasdaq Short Interest for July. Overall, I believe short interest increased 4.7%. However, the gains among the larger cap stocks seems be a bit more. Here is a list by market cap. Percentage Increase In Shorts 1. MSFT 1.6 2. INTC 11.1 3. CSCO 7.5 4. ORCL 21.8 5. Dell 25.0 It is just an indication that the traders are shorting the larger cap, higher dollar stocks. The dollars committed to shorting MSFT would be 6 to 7 times that of NTAP for example because of the price difference. One would expect traders to cover on stocks under $10 and look for bigger prey for purely psychological reasons. The odd thing is that mutual funds that are bottom fishing will prefer to buy the largest companies with proven track records first. That creates an interesting (possibly explosive) tug of war. The larger market cap stocks tend to have higher prices; so many in the Nasdaq are in single digits. That is another reason why I believe that although Nasdaq short interest increased 4.7%, it is understating the change in dollars committed to shorting. There is little doubt that the high shorting level is partly responsible for preventing this Nasdaq from retesting April lows as the technicals seem to suggest. Few were expecting a bounce or summer rally. Looks like there was enough skepticism even though it was not totally reflected in the usual contrarian indicators. As I have been saying, March was a special situation that creating an urgent selling frenzy and extreme indicators. We should continue higher on the Nasdaq as it appears we have finally started the summer rally.

To: JOHN W. who wrote (80909)	7/27/2001 1:38:30 AM
From: mishedlo	Read Replies (5) \| Respond to of 99985

John, If you want to call a truce I am willing. I am short. Forgot to cash out at the lows today. 2078 is enormous resistance and I really doubt we get there. My feeling is this rally dies tomorow afternoon. Fortunatly I had been playing the QQQ bounces well recently until today when I reloaded in the AM on a bounce and forgot to sell for the "lunch rally" that did not end. No doubt there are many that think this is the start of a bull run. However I do not believe the put call ratios confirm this at all. Heavy call buying this after this runup. I look at complacency, I see it all over. We have not seen any fear in the TICK count at all. This is how I judge things. -1000 = fear -1200 = near panic -1400 = total panic +1000 = panic buying We have not hit fear once this month in spite of JNPR and all kinds of crap hitting 52 week lows. Look at the rally the last time we saw fear (on that huge reverasl day on the NYSE). I made a huge mistake shorting the fisrt pullback of that. I have made many mistakes. I will make many mistakes more. My big problem right now is that I understand value. Values are few and far between IMHO. We are NOT going to build the internet over again. It is alreadly built. The Rice paddy farmer in China is not going to spend 5 years salary on a computer when all he wants to do is live. Fiber is overbuilt. 97% of fiber capacity is unused. Is JDSU a buy here? Is DELL or INTC a buy here? We are now in a CYCLICAL rather than a growth industry in most of tech. PCs will be replaced every 3-5 years just like TVs and refrigerators. PE rations WILL reflect that EVENTUALLY. There is over capacity EVERYWHERE. As long as Greenspan tries to prop up businesses that are doomed to fail, we are going nowhere. Competition is intense and no one is buying. This is nearly insane. Why would anyone want to own MU? Yet it refuses to drop. Is that the sign of a bottom? Is a strong rally in EBAY at a PE of 260 or whatever a sign of a bottom. Look at LWIN, clearly headed to ZERO IMHO, people buying that this morning but at least it did close down. Now look at the economy. Did it occur to you that we are headed for a recession. I disagree with Zeev on the timing of this. I say it hits early next year as in March, but I believe he thinks it will be much later in the year. You asked me my opinion so I wanted to show how I differ from others who you think I may be following. At any rate Zeev can speak for himself and I will speak for myself and apologies now to the turnips if I have mis-stated where he feels the recession will hit. J6P is very nearly tapped out. How many more refinances of his house can he do? Look at FNM, it is starting to crack. If housing goes what goes with it? Hmmmm. Carpet, appliances, lumber, etc etc etc. I note with interest that HD is now option going to give 3 year earnings targets. Why??? Perhaps cause the next 2 years will suck and they know it. You have not heard that hypothesis from anyone but me. Look at retail, sales down everywhere it seems. How long can someone with no money keep buying? Look at the layoffs announced in all these earnings reports today. For whatever reason consumser confidence is rising. How long can that last? What happens when J6P stops spending and corporations are laying off, and the USA which is the "buyer of last resort" stops buying. What then? Are you planning on buying a new PC, Car, SUV? Is corporate travel down. Hint (I fly every week). I see first class rows COMPLETELY EMPTY! Business travel down, hotel business must be down as well. Is business travel spending going to reverse soon? The US$ is starting to crack. That is good for the exporters (they think) but can they really compete against China? Pick up any product these days. Made in China likely stamped all over it. So if that does not help some of the exporters, but raises prices on our imports, where does that leave us. In fact if the US$ falls, and inflation ticks up (look at wages for a clue and then look at what imports might cost if there is a 10-15% hit on the US$), where will that leave us. Greenspan is in deep sh*t of his own making. Lowering interest rates and pumping $ into the economy for a TOTALLY ABSURD Y2K scare at a time when the economy was already overheated. This will go down in history as the classic over-management of all times. Greenspan should be replaced by a computer program IMHO. It would do a far better job. On the news front...... Just what good news is out there? Another rate cut? What will that do? J6P going to refinance his house again? Do not think so. Besides, long term interest rates have stopped going down. Look at the long bond for a clue. Bottom on long term rates was march I believe. Greenspan is pushing on a string and he knows it. The problem is he is taking the wrong approach. Just like Japan did. Will he keep lowering rates until they are ZERO? The problem is OVERCAPACITY. That can not be fixed unless some companies go under. Too much competition and too little demand meand too little profits. On the analyst front.... How many times will J6P buy the lies of walls street. Every buy every sell recommendation has been wrong. Is it any wonder the average guy has given up. Why are fund flows down? The fact remains we are STILL in the biggest bull market mania of all times. It takes time for these things to get corrected, but corrected it will get. At the real bottom, I doubt you see people chasing every bounce in MU or every "strong chart" on TA. Look at PWER last year. Totally insane. This year it is NVDA and PWER is in the ash can. No doubt after NVDA falls from glory some other story stock gets chased to insane levels. Look at ROOM. Hell look at almost anything (VRSN HGSI EBAY etc etc etc). Are these prices the sign of a bottom? Hugely negative earning on some of these multi-BILLION$ wonders. People think JNPR is a buy here cause it at 25. Well they thought it was a buy at 150 (after a 100 point drop, at 100, at 75, at 50, at 30 when it ran to 60, and now at 25). Selling routers.. Is that a growth industry these days. If not, why is CSCO not at $5. I am serious here. Perhaps it never gets there but that is probably all it is worth (especially when JNPR makes a better router). BUT...... There will be bear market rallies. They will be profitable to those that can time them and painful to those that can not. Are we starting such a rally now? I sincerely doubt it. There have been so many headfakes aroubd 2078 that I doubt anyone really knows. AS long as there are firm convictions on both sides, perhaps we just bounce between 1950 and 2200 until there is a catalyst. Without capitulation, however, we are going nowhere. BB thinks capitulation and the crash already happened. (At least that is my perception of his opinion, and again I apologise if I am mistaken). I really do look at what others have to say and try and take that into consideration. It is easy to get trapped into a viewpoint and stay there too long. I know as I have done it too many times. For the record, I have been trading for less than two years. Perhaps that means No One should be listening to me! I have a far better record at predicting where we are headed than all but a handfull of poster on SI IMHO. BUT my trading of those calls has not really been best at all. I have a tendency to be a tad too early or a tad too late. With these whipsaws and by being overleveraged I have at time gotten crushed, giving back most of my gains. but hopefully, you can see that I can express my own thoughts, in my own words, with my own reasons. Have I been influenced by a huge number of people in forming these viewpoints? Of course I have. There is not a single person here who is not a reflection of all the ideas read and believed or read and discarded. In that regard I am no different than anyone else, except for the fact that I go out of my way to find more facts on the economy, on stocks, on historical valuations. Now if I only knew EXACTLY what to do tomorrow. M