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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (37786)	7/24/2002 9:03:19 AM
From: Logain Ablar	Read Replies (1) \| Respond to of 67962

Hi Harry: I believe Donald Sew had class 1 buy signals with yesterdays close. I believe the buy in day is today (who can pick the bottom??) but this would only be for a s/t trade. I believe Zeev is also bullish @ this level but expects a v bottom today (his turnips have been too optomistic on this drop). Considering all the doom and gloom I'm reading and now hearing of J^P shorting (CNBC was promoting it this AM) an intermediate term bottom is close in time. Agree 100% on a retest. Without a sucessful retest there is no base for any long term (3 to 9 month) buys. Also QLGC raised guidance in their cc. Positive on the next quarter. They did indicate they expect overall IT storage spending to be down so growth will not be as robust. MCDTA raised revenue guidance 7% for next quarter. Tim

To: Johnny Canuck who wrote (37786)	7/24/2002 9:14:32 AM
From: Johnny Canuck	Respond to of 67962

Market Update -------------------------------------------------------------------------------- Analysis: An 8,000 bounce in stocks? -- Jul 23 2002 Jul 23, 2002 (United Press International via COMTEX) -- The market has moved fast since Thursday, with the Dow losing 624 points or 7.4 percent of its value in just two trading days, and swiftly fulfilling my prediction it would drop below 8,000. But in the past the level just below 8,000 has provided support. The market has rallied. That could well happen again now. Let us be clear on my fundamental view. I remain bearish on the U.S. economy and on U.S. stocks medium-term. But markets do not move linearly. The Dow has fallen steeply since I predicted a summer downturn in an April 3 article entitled "Time to Put Shorts On." It is now quite possible that the Dow will bounce from the sub-8000 low it hit Monday. There are a number of reasons that suggest this. The first is technical. Chart analysts -- to be found in every Wall Street firm -- would see grounds for the selling to stop. If you look at a chart of the Dow for the past five years (easily done on the Yahoo! finance pages) it is apparent that the Dow has found a floor at 8,000 points or a little below on two occasions in recent years. In the fall of 1998 and the fall of 2001 the Dow rallied having flirted with the 8,000 level. The chartists would tend to argue that it will either do so again now, or find itself without a good level of support, therefore running the risk of plumbing still greater depths. But the two previous occasions suggest strong support at and just below the 8,000 level. The Dow has bounced off this low twice before. Strategists, meanwhile, can offer fundamental reasons to suggest that the market is cheap now. Their reasoning is as follows. Financial scandals have brought the market down despite an encouraging economic backdrop. One strategist after another laments that the economy is recovering yet stocks are dropping. Indeed, both Monday and today, Tuesday, Citigroup and JP Morgan stock has dropped heavily as a Senate sub-committee hears testimony from both companies on their involvement in the finances of now bankrupt Enron Corp. The outcome of these hearings is unclear and it is far from unlikely that further financial scandals will emerge as the bubble market and bubble economy of the late-1990s fades. The question is whether the market has now fallen enough to take some of the bad news in its stride. As so often, I would not share the strategists' faith in economic recovery. U.S. industrial production has rallied now that inventories have been cut but the sustainability of U.S. consumer demand must be in doubt. It was super-charged in the second half of the '90s by rising stock prices and has been bolstered more recently by rising house prices. But higher unemployment, smaller bonuses, and the much lower level of stocks are likely eventually to cause U.S. consumers to curb their spending. Weak growth or recession is very possible in 2003, reducing company earnings and challenging again stock market valuations. But the consensus view on the economy is much more optimistic than mine. The bulls may soon be running and bellowing that with the market below 8,000 and economic recovery near-at-hand, stocks are cheap. Many investors may buy into that message. If that is the case, stocks could jump from current levels and the Dow could rise quite quickly -- by late August or early September, say -- well above 9,000. But we would judge that the rally we expect now is unlikely to be sustained for long. In the fall and moving into the winter, we would expect growing evidence that the consumer is curbing spending, bringing the possibility of low growth or even recession in 2003. That, in turn, would be likely to cause stocks to fall again, and even to break through the 8,000 support level that we expect to hold now. But, for now, as I have explained, I would be surprised if the current violent churning of the market -- with some stocks, such as Wal-Mart, Home Depot and housing stocks jumping Tuesday, while many of the banks sink to fresh lows -- did not resolve itself in a rally in coming weeks. The 8,000 level could again prove a solid support and provide a turning point -- but perhaps for the last time. Comments to icampbell@upi.com By IAN CAMPBELL, UPI Chief Economics Correspondent