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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Jibacoa who wrote (29036)	9/9/2002 2:53:54 PM
From: Jibacoa	Read Replies (1) \| Respond to of 29382

Here is another bearish comment at the Street.com And of course we have also the concern about inflation with oil and grain markets going higher as well as gold.<g> "Let's Do the Bear Market Time Warp Again By John Roque Special to TheStreet.com 09/09/2002 12:33 PM EDT Do you ever get the feeling that being in the market is sort of like watching the Bill Murray movie Groundhog Day? You know, kind of like you're caught in a personal time warp on the worst day of your investing life, and it goes on ad infinitum. That's not the only problem -- Murray at least had Andie MacDowell as his co-star. If past is prologue, then we should expect a few things to continue: Every few weeks or so, a Nasdaq-type company reports numbers that aren't as bad as investors originally expected. The result is usually a more than 3% rally -- and the obligatory advancing volume equals 82% or greater of total volume, and we get the "Are we having a 90% volume day on Nasdaq?" questions -- in what is otherwise a moribund, fetid and disappointing group of stocks. Every few weeks or so, our economics commentator reminds us when another improving economic data point is released. I have no comment on the economics stuff or on professional sports handicapping. (I aim to leave both to James, our economics expert.) But after the data release, a compulsory rally follows, in which New York Stock Exchange advancing stocks beat declining stocks by about 3 to 1 and advancing volume beats declining volume by about 2.5 to 1. Also, the heretofore weakest groups tend to stage the biggest bounces. Every few weeks or so, a semi-important rally develops. (I'm not minimizing the percentage gains that occur in the rallies, and I want to catch 'em just the same, but I continue to highlight in my meetings that the "time" component of any rally phase is usually not fulfilled.) Investors are quick to accept it as confirming "the low" or "the bottom." The rally then improves, quickly pressuring blasphemers into putting money to work for fear of "missing the turn," and absolute and relative strength for a select group of stocks begins to improve. Trouble is, every time we get these scenarios -- especially the last part of No. 3, in which absolute and relative strength for a select group of stocks begins to improve enough that they start to look technically tasty -- the market nears a turning point. The last one was just above my 950 resistance level on the S&P 500. (The recent closing high was 962.7 on Aug. 22.) So what's next? I'm gonna stick with the theme that market rallies are just that, and that the bear market continues. I'm gonna stick with the theme that I want to sell/reduce long positions for stocks that have rallied back into resistance. I'm also gonna stick with the theme that I want to buy stocks with strong patterns and avoid playing the oh-so-tantalizing bounce candidates. I think buying the potential bounce candidates is like eating the second Krispy Kreme donut: The first one is sweet, but the second one should be avoided. Market Specifics The Dow Jones Industrial Average, the Nasdaq and the S&P 500 are all below their downward-sloping 50- and 200-day moving averages. I'll use last Thursday's intraday low as support for these three indices: 8217.05 for the Dow, 1251 for the Nasdaq (and that was last Thursday's close, too), and 870.50 for the S&P 500. A close below these levels would signal that a leg down to the July lows will follow. Incidentally, I think that will happen anyway. I'm just unsure about the timing, and I think it might unfold after a failing rally above 910 for the S&P 500. I continue to believe that gold works to $340 an ounce, and I'm curious -- quite curious, as a matter of fact -- why virtually nobody is paying attention to the action in the CRB futures index. It's up 12% in the past three months, 18% year to date, and it's working right up to resistance from autumn/winter 2000 in the 230-235 area. Wouldn't it be another poetic piece of incontrovertible proof that everything in the market/economy continues to be so topsy-turvy that this thing breaks out above 235? Wonder if inflation will still be low when this happens?" thestreet.com Bernard