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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (38869)	5/11/2002 5:01:21 PM
From: NOW	Read Replies (1) \| Respond to of 209892

Sometimes a picture is worth a trillion words: economagic.com Change the starting date to 1959.... oops, no can do on that link...try from here: economagic.com

To: yard_man who wrote (38869)	5/12/2002 6:53:01 PM
From: re3	Read Replies (2) \| Respond to of 209892

from the toronto star... It's time for all those nasty bears to hibernate Bill Carrigan My work involves answering a lot of questions about the stock market from private investors and industry professionals. I can usually identify the informed individuals by the content of their question. Some examples of informed questions are: What do you think of the recent strength in the Asian stock markets? I have been holding energy stocks for 18 months; do you think I should lighten up on them? These "informed" investors have probably enjoyed the two-year advance in the energy sector and are planning an exit strategy. Some may be considering an asset shift into the Asian sector because of a pending currency realignment. Some examples of uninformed questions are: Which gold stock should I buy? Are the technology stocks still overvalued? These "uninformed" investors may have missed the big advance in the gold stocks because they were bottom-feeding in the tech sector. They also don't understand that value and valuations have little to do with stock prices. Growth stocks are always expensive and grief stocks are always cheap. One good example of a growth stock is the youthful Internet builder Cisco Systems Inc. At more than 100 times earnings, Cisco is cheaper then the aging IBM Corp., which is trading at less than 20 times earnings. A prudent investor should always monitor the fortunes of Cisco and the Nasdaq universe of new-economy stocks because we need to know if Internet commerce and the related information-sharing complex is truly "the next big thing." We also need to know that participants can make money building the thing. The great 2000-2002 technology bear has basically culled the herd and, hopefully, left us with stronger relevant participants in the new-economy complex. A new bull cycle in the Nasdaq would be a powerful argument in support of a new period or upwave in the new-economy world. This second Internet wave could well be the money wave, wherein surviving participants and their shareholders can profit from the venture, much like those who followed Columbus to the New World. Our chart today shows the weekly closes of the Nasdaq composite index. The chart supports my argument in favour of a new bull market that got underway about Sept. 24. First, consider the time argument. The length of time from the March, 2000, peak through to the September, 2001, low was about 18 months, which is the historic norm for a bear market. Note also the significant lows at A, B and C. These represent the three downlegs common in severe bears. Note also that a bear market or downtrend is a series of lower lows and lower highs. In the case of the Nasdaq, we got a new low about every 24 weeks, which is the norm for every downleg. Note the significance of the current advance from the September, 2001, low in that it is 34 weeks old and we have yet to make another new low. Come on you bears: Show me a new low or crawl back to your cave and sleep it off. My final argument in favour of a new Nasdaq bull is the emergence of a leader to show us the way. Last week, Cisco emerged as a worthy candidate when it surprised investors by posting an increase in sales. The other leadership candidate is Internet retailer Amazon.com, which also surprised investors a few weeks ago by generating positive cash for the first time ever. I am currently on the Amazon bandwagon. Monitor Amazon to see if it can post a new 52-week high above $18.60. That will surely kill off the last of those nasty bears.