To: Thomas Kelly who wrote (1077 ) 2/19/2002 9:46:57 PM From: Dr. Stoxx Respond to From buysell.com (recommended free newsletter):Readers of this newsletter should not have been caught by surprise by this latest market tank. We cautioned traders on the high probability of such a drop a couple of weeks ago. Today the first of our Nasdaq and QQQ targets were hit. Actually, our low-end targets were almost hit today as well with the Nasdaq and QQQ posting intraday lows of 1,745 and $34. Today’s drop may have come as a surprise to some given the huge jump in housing starts for the month of January. Housing starts popped 6.3%, the largest increase in two years. Housing permits also jumped, adding to the continued and remarkable strength in housing during the last year. Despite this obvious bright spot in the economy traders again focused on accounting worries. IBM bore the brunt of today’s Enronitus, dropping 3% and ending the day below the $100 mark, an ominous near term sign for the stock. Of note today was the fact that stocks, bonds and commodity prices, namely gold, closed in the red, a not so common! occurrence these days. Gold was hit by yet another clown analyst downgrade, no doubt trying to talk prices down to accumulate. News that the German Central Bank was selling gold did not help matters. As mentioned by us yesterday such a retrace in the gold market was expected and should be seen as healthy. On tomorrow’s economic calendar is the January CPI release. Consensus estimates call for an increase of 0.2%. The CPI for December came in at –0.2%. Should the CPI come in higher than expected today’s gold sell-off should quickly reverse.
