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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (6886)	11/20/2001 1:41:25 AM
From: Ibexx	Respond to of 99280

From Larry Wachtel, Prudential Sec's chief strategist (11/19): "Your lips say "no-no", but there's "yes-yes" in your eyes... The market expresses understandable signs of weariness but still manages to forge ahead, braced by prospects for the future. The Dow Industrial average rose 109 points and has now advanced over 20% from its September 21st low. Meanwhile, Nasdaq gained 35 points and has jumped 33% from its low point. These gains are approximating the April-May period, which faded badly into the summer, so one should not run amuck. But there are some crucial differences. For one, seasonalities are much more favorable for the Bull. Secondly, the 40-year low in short term rates has triggered hopes for economic recovery as well as triggering a huge refinancing boom. Let's also note this dramatic decline in energy prices which acts as a tax reduction for consumers. Finally, small and large investors remain troubled by the paltry returns in riskless investments like money funds and CDs. Big Board Breadth was bracing with a 3-2 ratio of gainers to losers and volume was heavy for a Monday, totaling $1.2 billion shares. The heavy turnover likely reflects the truncated nature of the week, given the Thanksgiving holiday on Thursday. That means, in effect, most of the action will be compressed into Monday and Tuesday. Retail stocks did well, helped by a two point advance in Lowe's, the #2 home improvement company, Home Depot, was a point-sized gainer in sympathy. Home Depot is a Dow component and other major gainers in the Blue Chip Index included Eastman Kodak, Alcoa, United Technology, 3M Corporation and American Express. Airline stocks moved higher, spurring the Dow Transportation Index to a gain of 35 points. Traffic has picked up slightly and the dive in energy prices means a reduction for jet fuel, the second largest cost component for an airlines. United Airlines gained two points while American and Delta were fractional gainers. Energy stocks were weak, as crude oil slumped as much as 7.4% in New York. Exxon-Mobil and Royal Dutch fell back. One exception was Phillips, which rose on news of a merger of Equals with Conoco. Drug stocks were spurred by Pharmacia which got approval for its arthritis drug and gained over three points. Pfizer, which distributes the drug was a fractional gainer. Palm and Handspring improved on Wall $treet Journal article speculating about a merger. Xerox gained on financing from General Electric, while Alcoa gained on restructuring news. On the calendar, housing starts fell less than expected in October, suggesting the home construction industry continues to buttress the economy. While sales have declined in recent months, builders are counting on a 30-year fixed rate mortgages to underpin the industry. The market is overbought but not overwrought as the advance has not as yet contained frothy overtones. But animal spirits could abound, so sobriety should never be too far distant." Ibexx