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

To: Zeev Hed who wrote (83309)	6/21/2002 9:28:51 PM
From: mishedlo	Read Replies (1) \| Respond to of 99280

Zeev can you explain the FA of RDRT as I just do not see it. I see a company with a fair amt of debt and a company that at first glance appears to be bleeding cash at an extensive rate (if the numbers on YHOO are correct). I also do not see growth in PCs and that seems to be their main business. Obviously I am missing something. M

To: Zeev Hed who wrote (83309)	6/21/2002 10:16:01 PM
From: Bandit19	Respond to of 99280

Zeev, Here are John Murphy's latest thoughts..... Fri, Jun 21, 2002 (#1) - DOLLAR PLUNGE WORRIES MARKETS Posted: 12:58 PM Eastern DOLLAR FUNDAMENTALS FINALLY CONFIRM BEARISH CHART... We've written several bearish comments on the U.S. dollar over the past few months -- starting mainly with the April drop through the March low and the 200-day moving average. Things continue to get even worse. Chart 1 shows the Dollar Index breaking chart support along the lows of last September -- another bearish sign. After all of that selling, the bearish fundamentals are finally kicking in. A record account and trade deficit reported yesterday has pushed the greenback even lower. Chart 2 shows the Dollar threatening to break the last major low formed at the start of 2001. Needless to say, a decisive break of that level would be even more bearish for the dollar. While virtually all foreign currencies are moving up against the dollar, most of the strength has come in the Euro. EURO THREATENING RESISTANCE... The Euro is a mirror image of the dollar. It's challenging the previous high formed at the start of 2001. A decisive move over that barrier (which appears likely) would simply confirm the breakdown in the dollar. This looks like a major base in the Euro. FALLING DOLLAR BAD FOR STOCKS -- BULLISH FOR GOLD... A falling dollar is usually bearish for U.S. stocks. For one thing, it shows lack of confidence in the U.S. economy. It also discourages foreign money from buying U.S. bonds and stocks. Recent numbers show that foreign money is already starting to leave the states. In time, attempts to support the U.S. currency may lead to higher U.S. interest rates, which would also be bad for bonds and stocks. As we've stated several times, the main winner in this scenario is gold and gold stocks. The gold chart looks remarkably similar to the Euro (and a mirror image of the dollar). Gold bullion is also challenging major resistance around $325. A decisive close through that barrier would be a major bullish breakout in gold. The XAU Index is also stalled at a major resistance barrier. The odds for bullion and the XAU breaking through resistance would be greatly increased if and when the dollar crashes through support. VIX MOVING UP -- BUT NOT FAR ENOUGH... If you review the Search feature on our Main Menu (insert VIX), you'll see that we issued several bearish warnings at the start of the year on the fact that the CBOE Volatility Index was in dangerously low territory (in the low 20s) and just starting to turn up. We warned that would be bearish for the stock market. Since then, the VIX has improved -- but not enough to signal a major bottom. The VIX usually trends in the opposite direction of stocks, and has recently climbed over 30 for the first time since last fall (coinciding with falling stock prices). As the next chart shows, however, meaningful lows in the market usually occur when the VIX reaches high levels (usually over 37.5) and starts to turn down. If you compare the VIX to the chart of the NYSE just below it, you'll see that the last three major stock bottoms took place with a VIX reading over 37.5 (actually closer to 40). The recent rise in the VIX is a good sign, and suggests that some type of bottom in stocks is closer than it was at the start of the year. However, the VIX doesn't appear high enough to support a major bottom. It may increase the chances for a summer rally, which usually kicks in at the start of July. The fact that so many of the major stock averages are nearing the lows of last year may also increase the odds for a summer bounce. If a summer bounce does materialize, however, we suspect another selloff during September and October will retest any summer lows. In other words, a short-term bottom may be near, but not a major bottom.