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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Terry Whitman who wrote (4900)	10/18/2001 3:52:37 PM
From: John Pitera	Respond to of 33421

Hi Terry, How did you guess -vbg- the Dali really gets around these days does't he -g- It's a very intereesting way to view the markets that they should be unstable over time, as they sort through the various factors and influences on them. and thanks for the kind words. Did you see the huge outside reversals days in everything yesterday, the NASD, NDX, SPX, OEX, RUT, DJIA, NYA, and amazingly they all repelled by their respective 50 day moving averages, after having been significantly below them in late Sept. What I find amazing is that so many different indexes made it to the 50 dma all on the same day! John

To: Terry Whitman who wrote (4900)	10/19/2001 10:06:07 AM
From: John Pitera	Read Replies (2) \| Respond to of 33421

We keep hearing it's coming--Warning: Argentina will default the Waiting for Godot Debt crisis.... plods along. ---------------------------------- Commentary: Biggest debt crisis in years is looming By Paul Erdman, CBS.MarketWatch.com Last Update: 3:25 PM ET Oct. 17, 2001 SAN FRANCISCO (CBS.MW) -- The world is about to be hit with the biggest debt and currency crisis in years. It is only a matter of days before Argentina will default on its sovereign debt -- which now amounts to $132 billion. Neither the International Monetary Fund nor the Bank for International Settlement nor the United States Treasury will step in to prevent this since none of them are willing to throw more money down that black hole. This default will inevitably trigger a major devaluation of the Argentine peso. The shock waves emanating from these Argentine events will roil currency markets throughout Latin America. Brazil's currency, the real, which has already depreciated 28 percent in the year to date, will be severely tested. And all of this will further undermine confidence in the currencies of those Asian countries that are facing rapidly mounting economic problems of their own as a result of recessions in their principal export markets. The mirror image will be renewed strength of the safe-haven dollar. Argentina's default will be triggered by the refusal of current holders of its public debt -- 60 percent of which are foreign institutions -- to accept a swap arrangement that would force them to accept huge losses now and still not solve the basic problems brought on by the irresponsible fiscal policies of the Argentine government. To cover its domestic budgetary deficits, during the past 10 years Argentina was forced to borrow $89 billion in the international capital markets, more than any other emerging market. To put this in perspective, Mexico, whose economy is twice as large as that of Argentina, has only borrowed half that much over the same period of time. The situation was brought to the breaking point last Friday when Moody's cut Argentina's credit rating to below that of any other country. Reflecting this, the yield on Argentine bonds is now 33 percent. How this new external shock will affect financial markets in the United States, Japan and Europe is an open question. But I believe it is safe to say that it sure won't help. Economist and author Paul Erdman is a CBS.MarketWatch.com columnist. His column also appears on FTMarketWatch. cbs.marketwatch.com.

To: Terry Whitman who wrote (4900)	10/21/2001 12:58:18 PM
From: John Pitera	Read Replies (2) \| Respond to of 33421

this is a very amusing article, talking about a non profit group that wants to bring back the bull market to show US Strength and Solidarity, which are needed due to 9-11. Roque is right that you can not wish a bull market back into place. The reason that Bear Markets occur is due to the excess capital that is spent creating too much capacity, too much inventory and an over saturation of products and services such as in the telecommunication sector. If bull markets did not end when they got out of control we'd eventually get to a point where there would be 100 website, and net ventures for every person on the planet. Obviously, things are not going to get that crazy, but we certainly lived through some bad craziness with our little speculative bubble Here is Roque's article: ----------------------------------------- Beware the Artificially Created Bull Market By John Roque Special to TheStreet.com 10/19/2001 01:26 PM EDT URL: thestreet.com On my way to a breakfast meeting Thursday, I had the incredibly good fortune to exit Grand Central Station at Lexington and 43rd Street. It was incredibly good fortune because right there on the sidewalk were two young kids (well, younger than me) enthusiastically handing out leaflets and stickers with the proclamation to "Bring Back the Bull." There was a placard there, too -- the kind that usually says "Venti Caramel Macchiatto: $4.75" -- but this one featured a bull, a flag and the words "Don't Leave the Bull at Half-Mast." The nonprofit group, Invest in US, has a Web site with some interesting items on it, too, such as: "Right now, each of us can make a difference." "Together, let's bring back the bull market and show the world we're stronger than ever." "For our country, stock indices -- the Dow, the Nasdaq, the S&P 500 -- are like a pulse, an indicator of our economic health and a measure of our country's self-confidence. When they've fallen, the other parts of our economy suffer as well ... There is now a way for all our citizens to jump into the fray. By bringing back the Bull market." "Creating a Bull market will take a belief that our country is strong ... We will spread the word through a multimedia campaign that encourages people to stay in the market, buy stocks and bonds and add to their IRAs and 401(k)s. Our goal is a long-term patriotic rally that will send a clear message of America's strength to our countrymen, our allies and our enemies." Patriotic, but Suspicious First things first: I'm all for better times. Who isn't? It's just that I'm for a transition period first -- something like a bear market, a bottoming phase with a lot of rebuilding, repair and recuperation, and then a bull phase. It's just that I find it really hard to believe that a new bull market has begun. Big rally? Yeah. Did I miss it? Yeah. But I still don't think we've all seen the second coming of Lazarus yet. That's mostly because the Dow Jones Industrial Average took 29 months to top. I don't believe a 29-month top will be repaired in three or four weeks -- even with all of the rate cuts, tax cuts, lower oil and gasoline prices, the armed forces so far pitching a shutout in Afghanistan and a media blitz like the one outside Grand Central Station. But I'm more than a little dismayed that groups like Invest in US are trying to convince investors they have the ability to create a bull market. Isn't this almost the same thing most Wall Street strategists have been saying since March 2000? Besides, we're supposed to know already that the investing dish is a meal best eaten without emotion. Their goal of a long-term patriotic rally seems forced. Besides, if history is any guide, investors don't create a bull market; they identify it slowly after it's already begun. This isn't a grass-roots movement like trying to convince Major League Baseball to drop the designated hitter. Yellow Lights Second, some things happened the other day that tell me, again, why it's still a very good idea to be cautious. A ton of stocks with "outside day" action. This technical term suggests that reversals will follow on the downside. For example, check out the action in Qualcomm (QCOM:Nasdaq - news - commentary) from Wednesday and compare it with the action from the day before. Wednesday's open was higher than Tuesday's. Wednesday's high was higher than Tuesday's. Wednesday's low was lower than Tuesday's, and it closed lower than Tuesday's low, at its low of the day. It's too technical, but easy enough to figure that it ain't a good sign. The inability to ignore the latest anthrax news. I'm not making light of this scare; I'm merely identifying that over the past few weeks, other instances of anthrax news went virtually unnoticed by investors. But the market was unable to ignore the new scares. The inability to ignore bad news isn't a good sign. Negative reaction to the Siebel (SEBL:Nasdaq - news - commentary) news. Again, the inability to shrug off bad news isn't a good sign. The same thing goes for other high-profile stocks like AOL Time Warner (AOL:NYSE - news - commentary) ; EMC (EMC:NYSE - news - commentary) , which suffered its first loss in almost 12 years; Mercury Interactive (MERQ:Nasdaq - news - commentary) ; PeopleSoft (PSFT:Nasdaq - news - commentary) ; and RF Micro Devices (RFMD:Nasdaq - news - commentary) . Dana's (DCN:NYSE - news - commentary) dividend drama. The company amputated its dividend from 36 cents to just a penny. Dana doesn't garner as much attention as Cisco (CSCO:Nasdaq - news - commentary) or other sexy stocks, but its dividend cut was the first one since 1936! I wonder what this will do to the "yield" stock phenomenon that has been the rage over the past few months. Wednesday's declines in the savings-and-loan group. Washington Mutual (WM:NYSE - news - commentary) fell 11%, Golden West (GDW:NYSE - news - commentary) shed 6.6% and Charter One Financial (CF:NYSE - news - commentary) lost more than 4%. This group's action was important because these stocks had been among the best year-to-date relative performers and because Golden West had announced record third-quarter 2001 earnings, up 49% year over year. The inability to embrace the good news is a negative. -------------------------------------------------------------------------------- John Roque is the technical analyst at Arnhold & S. Bleichroeder, a New York-based investment brokerage firm specializing in Europe and the U.S., and a frequent guest on CNBC