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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (40984)	9/6/2001 2:28:36 AM
From: stockman_scott	Read Replies (1) \| Respond to of 65232

From Agoraoutlook.com... 09/05/01 4:30 p.m est <<Truth be known I’m tired of this market and very tired of its action. Not to say I don’t love what I do but I’d rather be taking a trip with my family at the U.S Open right now than having to follow this market action. Ahhh, the good old days, place my trades, than be off and do whatever. That was why I started this Program in the first place because being an OEX day trader burned me out. It took a lot of work back then to be a successful day trader because there weren’t any fancy trading programs or computers to trade with. You had to have a "feel" for the market, which is something I have been able to carry forward. For example this is a time that a day trader needs to walk away as the market is turning every which way on a dime as there is no trend but you can tell that something is being set up. Anyhow now that I have unloaded a bit I will get back to my job here reporting what happened today in this ugh, exciting market! Volatility was very strong today as the market was all over the place all day. This may have been because volume finally started to return. The open was the most volatile even though it looked like it was going to be a flat to down open. Within the opening half-hour the Dow dropped like a stone to –70.00 points and then within twenty minutes was up +60.00 points to again move into negative territory within five minutes. That’s quite the bull/bear fight. The S&P 500 and Nasdaq Composite never moved that much off of neutral. From there the market flattened out until midday when the dumping of semiconductor, network and communication stocks saw their indexes move off about 6.0%. This took the Dow to new lows of –115.00 points, S&P 500 –18.00 points with the index trading below its closing low of 1117.58 on March 22nd. The Nasdaq Composite saw lows of –55.00 points. As the Nasdaq 100 index approached intraday yearly lows the market seemed to really panic and a buying spurt was able to lift tech off the ground and got the Dow into positive territory by new intraday highs of +70.00 points going into the final hour of trading. Even the S&P 500 and Nasdaq saw plus territory with highs of +4.00 and +5.00 points. It kind of looked like the exact opposite of yesterday but the battle had just begun as all three indices moved back and forth in positive and negative territory right up to the bell with the winner being the Dow as it closed up +36.00 points. Economic activity was again positive today with worker productivity rising in the second quarter as businesses layed off workers and cut hours. Worker productivity is the amount of output per hour of work rose at an annual rate of 2.1% in the April-June quarter. The new estimate is slower than the 2.5% growth rate the department reported a month ago, but matched many expectations. It was the best showing since productivity rose at a rate of 2.3% in the fourth quarter of last year. That was when the technological revolution was still helping expenses, now you just lay people off! Productivity rose in the second quarter as businesses cut hours at a 2.6% rate, the biggest drop since the first quarter of 1991. Output fell at a rate of 0.5%, the first decline since the first quarter of 1993 when we were coming out of our last recession. Payrolls have been cut by more than 800,000 in the 12 months ending in July. Gains in productivity are the key as they allow wages to increase without triggering inflation that would take up those wage gains. If productivity falters, however, pressures for higher wages could force companies to raise prices thus worsening inflation or laying people off. Even with the downward revision though, the 2.1% growth rate in the second quarter was still pretty good and was a big improvement over the first quarter’s low 0.1% rate of advance. From 1973 to 1995, productivity was very average around 1.0% per year. Since 1995, increases have more than doubled but you can probably expect them to go back to average now that the massive investments in high-tech equipment is finished as the so called "new economy" is becoming old! A report that is not usually taken seriously at all seemed to be what took the Dow off of its highs of +70.00 points at 10:00 a.m est even though companies announced fewer layoffs in August than in July. The problem was that the number of monthly job cuts is still too high to signal a recovery. Announced job cuts totaled 140,019, down 32% from July when companies announced 205,975 layoffs said Challenger, Gray & Christmas. However, job cut announcements grew 145% this month compared with August 2000 but duh, look at what has happened since last August! The main point is that there is no evidence reported by any industry that anything that could be called a decent rebound is on the horizon for this year or even early next year and that is what shook the market. Guess what was hit the hardest though so you can understand why this report isn’t that surprising, the high-tech industries of telecommunications, computers and electronics! Total layoff announcements in the three sectors rose 1,223% from one year ago. You can see how bad things are as there have been a total of 1,123,356 layoffs so far this year, only 165,736 fewer than the combined total for 1999 and 2000! It’s almost depressing I know! Yesterday I mentioned that the market is getting panicky as indicated by sentiment numbers and a subscriber provided me with another reading of sentiment, which I found quite interesting. It is a survey from lowrisk.com that reveals public sentiment. It revealed that there are only 10% bulls and 74% bears right now so along with all of the other readings things are looking pretty bad. It has only been going since 1997 but it is still the lowest reading since it started. Normally I think that the public trader is very wise but in extreme conditions as in 1998 when it looked like the market was going to zero I think panic sets in a bit. Another subscriber also mentioned that there were still too many bulls if you looked at the Investor Intelligence numbers. Today it was reported that there were 44.3% bulls compared to 30.9% bears. I have to tell you that I have been watching these numbers for many many years and to me they are a very poor predictor of market action, especially since 1995. The first reason being is because they don’t ever really change that much and I do think the public is getting smarter while these guys are getting dumber. There are very few that I will ever listen to and I’m not a follower anyhow as I’m neither ever really bullish nor really bearish because all I do is sell options on both sides of the indices! One thing for sure though is that it seems like the market is getting really wound up for something. Today may have been that day as it sure bounced quickly off of intraday lows with decent volume. There was another surprising statement made today, which I can’t believe people even listened to, as it was so dumb. It is absolutely amazing to me how these analysts can make so much money yet be so stupid. Merrill Lynch came out and said that there will be no fundamental improvement in the communications-equipment area until late 2002. They expect growth in the cell market to be negative now by -5%, compared to earlier estimates for +10% growth next year. This will be the first fall in history and because of slowing subscriber growth and weak demand for replacement phones, the firm has also cut its forecast for global handset sales. First off, can we get anymore negative as that is a huge cut and why make yourself look even dumber by saying it when were about to likely come out of a slowdown in the economy and stocks are near their lows. Boy they must be really smart thinking these stocks will be getting to near zero or they have a huge supply of stock to sell. Hmmm Recently everyone came to the conclusion that computers are now a household appliance so why buy a new one unless it’s an Apple for something a bit different which means that computer stocks are obviously going to be dead. I thought cell phones were already a household appliance so I’m sure glad that Merril finally realized it and told me that they might flatten out because I might have missed the fact that EVERYBODY I KNOW HAS A CELL PHONE! Now you can see why I’m getting so frustrated with the obvious! I have been saying forever now or at least since last years Nasdaq peak of 5000 that tech will be dead until something new comes out and so far I’ve been right. The good thing though is that I’m going to relax and watch Andre beat the smithereens out of Pete tonight in tennis so that will be a lot better to watch than the charts and Globex futures I studied all last night! Sorry its taking me so long to get to e-mails but I promise I will soon.>> Index Yesterday Today Change Percent Dow 9997.49 10033.27 +35.78 0.3 S&P 500 1132.94 1131.76 -1.18 0.1 S&P 500 Futures Sept. 1131.00 1133.50 +2.50 0.2 S&P 100 578.04 578.91 +.87 0.1 Nasdaq Composite 1770.79 1758.99 -11.79 0.6 Russell 2000 466.96 462.49 -4.47 0.9 30-Year Bond 5.48% 5.48% +.10 10-Year Bond 4.96% 4.96% -.43