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To: Dale Baker who wrote (31267)	9/29/2002 10:53:46 AM
From: Dale Baker	Respond to of 118717

Good analysis of JPM: FOOL ON THE HILL JP Morgan Chases Credibility There's been a common thread in this past year of scandals and meltdowns -- JP Morgan Chase seems to be in the middle of the mess, every time. The cost to its shareholders has been severe -- more than $40 billion in market cap evaporated this year. Some may be tempted to pick up this old-line name with the 7% dividend yield. We don't think that's a good idea at all. By Bill Mann (TMF Otter) September 27, 2002 For years, the Dow Jones Industrial component with the highest dividend yield was Philip Morris (NYSE: MO). During the depths of the legal threats against its very existence, Flip Mo' had dividend yields approaching 9%. Even today, it stands at above 6. Not so long ago, though, JP Morgan Chase (NYSE: JPM) surpassed Philip Morris as the company with the highest dividend yield -- in this case, over 7%. It's a distinction the bank certainly does not want. There is a nice calculus for companies that offer dividends. In some ways, dividends help people take on more equity risk because they're being compensated in cash by a check from the company. Look at it this way: You have two companies offering similar risks. Both have dropped more than 80% in stock price from their highs. One offers a dividend; the other does not. That company's dividend yield (meaning the percentage of current share price of the combined dividends paid over the preceding year) is now 5%. Which company do you buy? OK, OK -- if you answered anything other than "not enough information," you fail the test. But dividends do play a significant role in stabilizing markets. A company with shares spiraling downward looks to the world like a disaster, while the same company maintaining a dividend can look ever-so-much like an opportunity. The trouble with JP Morgan is not simply its warning last week that earnings are down and non-performing assets are up. The trouble is much bigger, and bears risk for much more than just the shareholders of JP Morgan. So, if you're looking at that dividend and saying, "This is one of the oldest, most trusted names in America...," then I suggest you turn the other way. JP Morgan has legal risks, credit risks, and it also happens to be the largest dealer in the world of derivatives, with a notional value of nearly $26 trillion, according to the U.S. Office of Comptroller Currency. That is double the amount of the U.S. GDP for 2001. Most of the derivative exposure is with companies that maintain low credit risk, and further of the entire notional value, JP Morgan estimates it has exposure to 5%. Still, that's $1.3 trillion. These positions aren't exactly liquid, and that's what's dangerous. When a company has to unwind its positions and finds no buyers, it can cause a catastrophe. That's what happened with Long Term Capital Management in 1998, when its complicated models failed to predict what would happen when everyone rushed for the exit at the same time. Given the size of JP Morgan's portfolio, a big roiling problem could cause turmoil throughout the financial markets. Where complicated = stupid So, what are derivatives? They're basically bets on the direction of all things financial. There are simple derivatives, like a bet that interest rates will rise by X% over the next two years, and there are complicated ones that seem to have no real connection with actual events. These are designed to reduce risk. If you see an event that could cost your company $50 million, such as the Japanese yen going to 100 to 1 U.S. dollar, you might buy a derivative contract, for, say, $5 million. This contract will let you pay $20 million if, at any point over the next three years, the yen reaches 100:1. If it doesn't reach that level, the contract costs you $5 million. If it does, you must pay the $20 million, meaning the cost of the contract was actually $25 million. At the same time, you didn't lose the $50 million you would've lost had you not bought the contract and the yen reached 100:1. If you think this is a simplification, you're right. Here's a 162-page Deloitte & Touche report on accounting for derivatives under FAS 133. JP Morgan sells derivatives -- a ton of them. They have these stupendous models that are supposed to pair off uncorrelated events; so, in theory, the risk to JP Morgan is zero. It's nice, in theory, but these models only operate under the expected distribution of events. As Long Term Capital Management taught us, the unexpected happens. And in this past July and August, the enormous stress on the stock market meant that almost everything was moving the same way -- down. JP Morgan's trading revenues dropped by 90% as a result. As you can imagine, these contracts are awfully tough to value. Also, they don't fit on balance sheets very well. Ask Enron. These complex trading strategies work under many circumstances, but when they fail to control risk, they fail in spectacular fashion. According to some experts, we can expect the same to happen to JP Morgan over and over until the stock market comes out of the doldrums. As the assets crumble So the deal now is that, at a market capitalization of $38 billion, JP Morgan is trading below its book value. This is a sign the market expects a company to destroy equity in operations, not grow it. This is precisely what has taken place as every single big financial disaster this year seems to have JP Morgan sitting in the middle: Enron, WorldCom, Adelphia, Global Crossing, Argentina, Kmart, Brazil. And in the most recent installment, JP Morgan wrote down $1.4 billion in non-performing assets, blaming bad loans to the battered telecommunications sector. Even so, JP Morgan maintains a reported $8 billion exposure to telecoms. Which loans did JP Morgan write down? They don't say. There is a basic truism about banks. It is nearly impossible for an outsider to determine what credit risks the banks face until it is too late. There is an old adage: "No loan ever looks bad on the day it is signed." Just so, one of the scariest things for an investor to see is a bank that is trying too hard, being too aggressive. In the boom years, it seems that JP Morgan was among the most aggressive in lending money to telecom and cable companies, a great strategy when everything high tech was going up. When the weather turned, it seems JP Morgan was the company farthest out at sea. JP Morgan just had its credit rating downgraded to A+, which is still high. Any further credit rating downgrades could, however, put it in a spiral of non-compliance. If the suit fits As if these threats were not opaque enough, there is also the risk of lawsuits and myriad other legal action against the company. Most notably, JP Morgan has caught the Enron flu, due to its role helping the defunct energy trader structure its off balance sheet vehicles, the same ones that helped tank the company. It has been named in several suits, and is also being investigated by the Feds for its role in Enron's hide-the-debt schemes. If the courts allow the suits, the exposure JP Morgan faces could be enormous, since it is one of two deep pockets left after the collapse of Enron and auditors Arthur Andersen. As a result of the firestorm surrounding JP Morgan's involvement in these many blowups, CEO Bill Harrison went on the offensive, stating in a recent Wall Street Journal article, "After every bubble, there is a search for scapegoats. To say that (banks) contributed to or even condoned fraud, when the evidence indicates that they have been among the parties most damaged, only adds insult to injury." Quatsch. When current Treasury Secretary Paul O'Neill first took over as CEO of Alcoa (NYSE: AA), he said that bank after bank came to him with plans to dress up his company's balance sheet with such transactions, each one netting millions for the bank. The Enron model was lauded throughout the investment-banking realm as one to be emulated. And all of these deals -- all of them -- were designed to hide risk from the owners of these companies, the shareholders. JP Morgan may not be found guilty of fraud in any of these instances in a court of law, but they knew precisely what they were doing. And on the off chance that they didn't, then JP Morgan isn't run by crooks -- it's run by morons. All of this is to say the following: JP Morgan flew awfully close to the sun during the height of the technology boom, and now it has plummeted back to earth. It is the classic story of a bank that tried too hard and unwittingly took on risks it didn't know it had. When bad loans are chewing up assets and derivatives (on factors that seemed to have no correlation) suddenly move down in tandem, you have the makings of a problem. Add to that a management that wants to deflect blame rather than address the obvious problems, and you have a recipe for disaster. Fool on! Bill Mann, TMFOtter on the Fool discussion boards

To: Dale Baker who wrote (31267)	9/29/2002 4:49:01 PM
From: Ray Rueb	Read Replies (2) \| Respond to of 118717

Ray's Review of 50% Gains Portfolio - Sep 27 Continuing to update my previous judgments in the context of Dale’s portfolio. What are Ray's general market indicators saying?: Aug 28: Please note that a lot of stocks, as well as the DIA and QQQ are cresting (or have recently crested) the top of a waveform - this unusual occurrence (convergence) is the reason I'm violating my balance rule and am currently 100% short. Possibly we're at the end of a 5 week dead cat bounce off the late July lows and we're beginning 5 weeks of slide. Today was a good day. Sep 06: Since Aug 28 the DIA and QQQ have slid straight down their slopes, until Friday. The question is: was Friday the beginning of an uptrend or just a temporary speed bump on the slippery slope into the pits of October? The MACD tends to smooth curves and ignore speed bumps. IF we’re up Monday, Tuesday AND Wednesday, THEN the MACD will reverse all those charts and I will reverse all my positions. Sep 15: The DIA and QQQ seem to be continuing downward slides. The MACD process of smoothing curves seems to have smoothed over the few up days last week and displays them as sideways movement. The DIA is clearly headed down again, while the QQQ is not as clearly heading down (still showing sideways). This pattern leaves me to continue my HOLD SHORT overall recommendation. Sep 21: As of Monday the DIA and as of Tuesday the QQQ are both in severely negative slides. No end in sight. HOLD SHORT. Sep 27: On Wednesday night I announced a COVER call for DIA and QQQ. this IS NOT me saying BUY. This is me saying COVER (for now). What are my charts saying?: Aug 28: my charts are SCREAMING SELL and SHORT Sep 06: my charts are saying HOLD onto your SHORTs and watch for a general whipsaw and beartrap on a false rise. Sep 15: my charts are saying sideways but HOLD SHORT Sep 21: my charts are SCREAMING HOLD SHORT Sep 27: my charts are cautiously saying COVER My actions during and comments about the past week: Aug 28: 5 good strong up days and all those negative charts will look much brighter. I give that a 10% chance of happening. Sep 06: Had 1 up day. Watching carefully, but still 100% SHORT - had to sell my PGO (for a 10% profit) to cover my margin due to Fridays rise in the market. Sep 15: Had 2 more up days (3 in a row), but then closing flat on Sep 11, and a steep dive on Thursday left us even for the last 10 days. Sep 21: Thursday was a banner day for my positions (I went up 11% in one day - great for short positions). Almost 100% short, took a single LONG late on Friday to help balance my portfolio. Sep 27: Tuesday late day I covered 1/2 of my position. On Wednesday, I covered the rest. For now I'm in cash, 1 long position (PGO) and 2 put positions (MCCC and ZIXI). Dale’s HOLDINGS: CATEGORY - STOCK (COST BASIS updated periodically to reflect averaging into positions) FINANCE - Aug 28: ACGL (18.31) - 27.94 - HOLD 1 or 2 Days, Maybe SELL and SHORT. Sep 06: ACGL (18.31) - 27.00 - SELL and SHORT. We’re beginning a slide now. Sep 15: ACGL (18.31) - 27.70 - HOLD SHORT Sep 21: ACGL (18.31) - 28.30 - The beginnings of a COVER signal, need Monday and Tuesday to confirm a BUY signal. Watch this one if you're short. If you're long, HOLD LONG. Sep 27: ACGL (18.31) - 27.99 - Showing a weak BUY signal on the MACD, BUT the price has a ceiling at 28, almost like there is heavy selling at 28. If this breaks 28 it may run. HOLD LONG. Aug 28: ACGL OCT 35 calls (.9) - Stock at 27.94 - Ouch! If these are worth anything, I'd get out, unless you're expecting big news. Sep 06: ACGL OCT 35 calls (.9) - Stock at 27.00 - It’s not going to get better. Sep 15: ACGL OCT 35 calls (.9) - Stock at 27.70 - Still low possibility Sep 21: ACGL OCT 35 calls (.9) - 28.30 - Still low possibility, but looking brighter. Sep 27: ACGL OCT 35 calls (.9) - 28.30 - Still low possibility, but without a breakout past 28, forget it. Aug 28: AFL-short (27.1) - 30.02 - HOLD SHORT Sep 06: closed position - 29.44 - Still on the slope HOLD SHORT Sep 15: closed position - 30.10 - HOLD SHORT Sep 21: closed position - 29.62 - HOLD SHORT Sep 27: closed position - 29.62 - COVER on Wednesday under 29. Weak BUY Aug 28: BBX Nov 12.5 calls (.4) - Stock at 10.14 - Ouch! I'd SELL. Sep 06: BBX Nov 12.5 calls (.4) - Stock at 9.63 - It’s not going to get better. Sep 15: BBX Nov 12.5 calls (.4) - Stock at 9.60 - Still low possibility Sep 21: BBX Nov 12.5 calls (.4) - Stock at 9.25 - Stock on a low slide, options getting farther away. Losing time premium. Sep 27: BBX Nov 12.5 calls (.4) - Stock at 8.80 - Stock showing COVER. A 50% stock move in 8 weeks? Unlikely. Aug 28: BFCFB (7.55) - 6.49 - Possibly a reasonable long right now. HOLD LONG Sep 06: BFCFB (7.55) - 5.50 - This turned south on Friday, an up day for most of the market. SELL Sep 15: BFCFB (7.55) - 7.00 - Very volatile, but now in a light uptrend that may be ending. We passed a BUY signal on Tuesday. HOLD LONG, but watch for SELL signal if downturn is seen. Sep 21: BFCFB (7.55) - 5.50 - Now I'm understanding this, there is no liquidity - my comments are meaningless without liquidity. Sep 27: BFCFB (7.55) - 5.50 - No liquidity, no call. Aug 28: CERG (3.78) - 2.31 - rising waveform after a steep drop - HOLD Cautiously, might be on a dead-cat bounce. If a downturn is seen, SELL. Sep 06: closed position - 2.30 - Time to SELL Sep 15: closed position - 2.22 - moving sideways with slight rise in chart, but stay out. Sep 21: closed position - 2.03 - moving sideways with slight rise in chart, but stay out. Sep 27: closed position - 1.97 - moving sideways with slight rise in chart, but stay out. Aug 28: ET (3.33) - 4.22 - Cresting waveform. SELL and SHORT. Sep 06: ET (3.33) - 4.69 - Sideways waveform after a crest. HOLD LONG or SHORT cautiously. Sep 15: ET (3.33) - 4.84 - Still sideways after a crest. HOLD LONG or SHORT cautiously. Sep 21: ET (3.33) - 4.42 - Clear SHORT signal Sep 27: ET (3.33) - 4.45 - COVER signal Sep 06: ET Sep 2.5 calls (1.85) - stock at 4.69 - you have 2 weeks to make it to 4.35 plus enough to cover high option commissions. The stock is in a downtrend with the hint of a bottom. Very risky position to take. If the price starts heading down, I’d get out FAST. Sep 15: ET Sep 2.5 calls (1.85) - stock at 4.84 - should be at .50 profit, this means break-even when you factor in commissions. Waiting this one out into a triple witching day, not my idea of fun. Sep 21: Exersized the options - stock at 4.42 - took a loss here. Taking delivery of stock into a SHORT signal is a bad move. I would have just sold the options. Aug 28: FMT (4.3) - 5.69 - Cresting waveform after a high floor. SELL and SHORT SHORT SHORT. Sep 06: got stopped out of position - 4.98 - Nasty fall to 4.5 on a Moody’s downgrade. Clear lightning strike. Currently on a dead-cat bounce. Medium term the chart says HOLD SHORT Sep 15: closed position - 5.08 - Chart is still in a downtrend. HOLD SHORT. Sep 21: closed position - 5.20 - Chart is sideways but still in a downtrend. HOLD SHORT. Sep 27: closed position - 4.84 - Chart is sideways but still in a downtrend. HOLD SHORT. Sep 06: HTHR (27) - 26.86 - Flat after a major downtrend - chart says sideways for near term price movement. OK place to go long. HOLD LONG. Sep 15: HTHR (27) - 25.98 - Chart has finished a minor uptrend, and seems headed down. SELL Sep 21: HTHR (27) - 25.29 - Chart is heading into a minor downtrend that could accelerate with the market. SELL if long, HOLD if short, stay away if not in and wait for clear BUY signal. Sep 27: HTHR (27) - 25.15 - Chart is sideways. weak HOLD SHORT. Aug 28: IPCR (28.89) - 29.33 - 3 days past Cresting waveform SELL and SHORT Sep 06: closed out position - 30.00 - Shallowing to flat on a bottoming waveform. Could be ready for a BUY if the general market turns up. Next week is key. Sep 15: closed out position - 30.17 - In a slight downtrend. This might go sideways before heading down. HOLD SHORT. Sep 21: closed out position - 28.58 - Major downtrend coming up. HOLD SHORT. Sep 27: closed out position - 28.58 - Still in downtrend. cautiously HOLD SHORT. Sep 06: JPM-short (24.5) - 23.91 - Early downtrend after a strong uptrend. Not my favorite place to short from, but a clear SHORT signal nonetheless. Bravo, good position! HOLD SHORT. Could be the beginning of a long downtrend, especially if lightning strikes as you suspect. Sep 15: JPM-short (24.5) - 22.04 - Steep slide. HOLD SHORT for at least 5 days. Sep 21: closed position - 20.18 - Steep slide, but shallowing, might be a cover signal coming. HOLD SHORT but watch for cover signal. Sep 27: closed position - 18.34 - Still sliding, but a weak COVER signal seen on Thursday at 19. Aug 28: MAXF (3.48) - 6.00 - Early Cresting waveform HOLD 1 or 2 Days, Maybe SELL and SHORT. Sep 06: MAXF (3.48) - 6.04 - Flat after a crest with a slight downtrend. HOLD 1 or 2 Days, Maybe SELL and SHORT. Sep 15: MAXF (3.48) - 5.88 - Early downtrend after a crest. Clear SHORT signal. Sep 21: MAXF (3.48) - 6.02 - Shallowed a bit during a 1/2 day run to 6.30 (bad sign for longs), but no uptrend, still in a downtrend. HOLD SHORT. Sep 27: MAXF (3.48) - 6.02 - Stock price has ceiling around 6. Bad sign for longs. HOLD SHORT. Aug 28: MCGC (17.9) - 16.80 - Still in a rising waveform - HOLD Sep 06: MCGC (17.9) - 16.22 - Crested and heading down. SELL and SHORT Sep 15: MCGC (17.9) - 15.87 - Slight, but clear downtrend. HOLD SHORT Sep 21: closed position - 13.75 - Major downtrend, no cover signal in sight. HOLD SHORT Sep 27: closed position - 13.30 - Shallowing into a bottoming waveform after major downtrend. Cover not seen, but probably imminent. COVER. Aug 28: QBEIF (3.35) - No chart, no comment, no trade Sep 06: SCH-short (8.9) - 9.32 - Early downtrend after a strong uptrend. Not my favorite place to short from, but a clear SHORT signal nonetheless a couple of days ago. Today however, the chart has flattened and is not in as clear a downtrend, though it did bump it’s head against the 50 day EMA and back off, a good sign for a short. This is exactly why it’s not my favorite place to short from. HOLD SHORT, but be watchful of this one, could get whipsawed by this. Sep 15: SCH-short (8.9) - 10.01 - Did you close this? Cresting after a quick pop up. This is a better place to short from. Since you're already short, HOLD SHORT. Sep 21: closed position - 9.05 - Major downtrend just beginning. Still a good place to short from. SHORT and HOLD SHORT. Sep 27: closed position - 8.95 - weak COVER signal at 9. Sep 21: WM (33.5) - 32.48 - Major downtrend in progress. This is HOLD SHORT territory. I would have waited for a BUY signal; we haven't even seen the cover signal yet. WAIT for BUY signal. Sep 27: WM (33.5) - 31.82 - Now getting weak COVER signal. Sep 21: WTM (300) - 301 - Still in a downtrend. Not my favorite place to go long. This is HOLD SHORT territory. I would have waited for a BUY signal; we haven't even seen the cover signal yet. WAIT for BUY signal. Sep 27: WTM (300) - 298 - Weak COVER signal at 295. ENERGY - Aug 28: DUK (24.35) - 27.29 - Early Cresting waveform HOLD 1 or 2 Days, Maybe SELL and SHORT. Sep 06: DUK (24.35) - 24.99 - Past the crest. SELL and SHORT Sep 15: DUK (24.35) - 22.98 - Clear downtrend. HOLD SHORT Sep 21: DUK (24.35) - 20.40 - Latter stages of a major downtrend, maybe another week to slide. HOLD SHORT Sep 27: DUK (24.35) - 19.10 - Very weak COVER, almost non-existant. For now cautiously HOLD SHORT. Aug 28: OIH (48.16) - 53.99 - Early Cresting waveform HOLD 1 or 2 Days, Maybe SELL and SHORT. Sep 06: closed out position - 51.15 - Shallowing to flat on a bottoming waveform. Could be ready for a BUY if the general market turns up. Next week is key. Sep 15: closed out position - 51.70 - Sideways on a bottoming waveform. No way this is a buy. HOLD SHORT. Sep 21: closed out position - 48.01 - Major downtrend beginning. HOLD SHORT. Sep 27: closed out position - 50.55 - Clear COVER on Wednesday at 48. COVER. Aug 28: PGO (1.75) - .62 - Mushy place in the chart - HOLD (you are expecting some good lightning here, aren't you?) Sep 06: PGO (1.75) - .66 - Still a Mushy place in the chart - HOLD (you are expecting some good lightning here, aren't you?) Sep 15: PGO (1.75) - .86 - Still a Mushy place in the chart - HOLD (you are expecting some good lightning here, aren't you?) Sep 21: PGO (1.75) - .94 - Possibly getting ready to pop - HOLD (you are expecting some good lightning here, aren't you?) Sep 27: PGO (1.75) - .82 - May be heading down again, too early to tell. Cautiously HOLD LONG. Aug 28: PGO Nov 5 calls (2.2) - Stock at .62 - Ouch!!!! even with the lightning, yeouch! Sep 06: WMB_p (8.15) - No chart, can’t comment BONDS - Aug 28: LVLT 2008 11% Bonds (58) - No chart, no comment Aug 28: NXTL Sep 2007 bonds (76.50) - No chart, no comment Sep 06: TWTC 2011 bonds (50.75) - No chart, no comment SOFTWARE - Sep 15: AKLM (1.97) - 2.29 - Lightning hit (TV talk) after you bought. MACD is still negative. I still say this is headed for 1.5. Good buy, but I'd scalp it - SELL. Sep 21: closed position - 1.31 - Lightning hit again, this time bad news. Beginning a downtrend to maybe 1.0. Stay away for maybe a week. Figure out if you like this stock because a "dead-cat bounce" is forecast for week after next. Sep 27: closed position - 1.13 - Shallowing on a bottoming waveform. Weak COVER signal. Dead cat bounce time. If you think this stock won't break 1.00, BUY under 1.10 and wait for bounce next week to 1.35 or more. Aug 28: JDAS (13.3) - 12.32 - I posted on this one in the SI column for JDAS. Long at 11.70, out at 14.40. I expect this to head to at least 10.5 - SELL. Sep 06: JDAS (13.3) - 12.55 - Shallowing to flat on a bottoming waveform. Could be ready for a BUY if the general market turns up. Next week is key. Sep 15: JDAS (13.3) - 12.89 - Shallowing to flat on a bottoming waveform. Sideways, but may head down. SELL Sep 21: closed position - 6.96 - Lightning strike (revised guidance downward) Slide will continue. Stay away for maybe a week. Figure out if you like this stock because a "dead-cat bounce" is forecast for week after next. Sep 27: closed position - 6.67 - Shallowing on a bottoming waveform. Weak COVER signal. Dead cat bounce time. If you think this stock won't break 6.00, BUY under 6.70 and wait for bounce next week to 8.35 or more. TRANSPORTATION - Sep 15: FLYR (9.9) - 10.65 - Price is floored at 10. Buy at 9.9, sell at 10.5. Repeat if necessary. The MACD is kind of a long term BUY. Sep 21: FLYR (9.9) - 9.88 - Price is floored at 10. Buy at 9.9, sell at 10.5. Repeat if necessary. The MACD is kind of a long term BUY. Sep 27: FLYR (9.9) - 9.80 - Price is floored at 10, but breakng through on the down side. Bad sign for longs, but the MACD is kind of a long term BUY. Aug 28: KZL (23.4) - 24.41 - Not enough data to comment. Given my feelings about the market, I'd SELL. Sep 06: KZL (23.4) - 24.80 - Not enough data to comment. Possibly HOLD with an eye to SELL. Sep 15: KZL (23.4) - 24.30 - Not enough data to comment. Based on limited information: clear SHORT signal. Sep 21: KZL (23.4) - 23.31 - Not enough data to comment. Based on limited information: Major slide beginning. HOLD SHORT Sep 27: KZL (23.4) - 22.95 - Not enough data to comment. Based on limited information: Slide shallowing but still HOLD SHORT. Aug 28: SKYW (18.3) - 15.41 - Mushy place in the chart to be - Given my feelings about the market, I'd SELL. Sep 06: SKYW (18.3) - 13.88 - Clear SELL signal. Sep 15: SKYW (18.3) - 14.55 - This is headed towards 52 week low of 9.75. SELL. Sep 21: SKYW (18.3) - 12.17 - Sideways MACD with a price slide. Clear SELL signal. Sep 27: SKYW (18.3) - 12.90 - Sideways MACD with a price slide. Short term bounce off of 11.5. COVER BUSINESS SERVICES - Aug 28: COGI (2) - 1.81 - Mushy place in the chart to be. The real problem here is the lack of liquidity. I'd rather be in PGO, that's why I sold my COGI today and will put the money into PGO tomorrow or Tuesday. Sep 06: COGI (2) - 1.70 - Clear SELL signal. Sep 15: COGI (2) - 1.69 - The lack of liquidity is still a problem. What is the real market price here? I'd SELL. Sep 21: COGI (2) - 1.70 - Clear SELL signal. Sep 27: COGI (2) - 1.63 - The lack of liquidity is still a problem. Sideways anticipated unless general market moves up or down. Sep 27: IDCO (12.65) - 12.55 - Shallowing to bottoming waveform. COVER signal, but no clear BUY signal. REAL ESTATE - Aug 28: NFI (22) - 28.18 - Early Cresting waveform HOLD 1 or 2 Days, Maybe SELL. Sep 06: NFI (22) - 29.90 - Still an Early Cresting waveform, but now has a upward trend. HOLD LONG but watch for downturn. Sep 15: NFI (22) - 29.50 - After the crest. SELL and SHORT. Sep 21: NFI (22) - 24.77 - Early stages of a major downtrend. HOLD SHORT. Sep 27: NFI (22) - 23.11 - Bounced off of 20.5. COVER Sep 27: NVR-short (309) - 302.95 - Post crest and in a downtrend, gave off clear SHORT signal on last Thursday at 312. HOLD SHORT; OK trade. BROADCASTING - Sep 27: CVC-short (10.09) - 9.94 - Post crest and in a downtrend, gave off clear SHORT signal on last Friday at 10. HOLD SHORT; good trade. Aug 28: DIS (17.3) - 15.40 - Mushy place in the chart to be - Given my feelings about the market, I'd SELL Sep 06: DIS (17.3) - 15.36 - On a slide but shallowing to flat on a bottoming waveform. Could be ready for a BUY if the general market turns up. Next week is key. Sep 15: DIS (17.3) - 15.50 - Mushy place in the chart to be - SELL Sep 21: DIS (17.3) - 15.24 - Mushy place in the chart to be, minor downtrend beginning. SELL and SHORT Sep 27: DIS (17.3) - 15.24 - Mushy place in the chart to be, minor downtrend beginning. HOLD SHORT Sep 06: L (8.61) - 8.48 - Post crest and in a clear downtrend - Bad place to go long; I would have waited. SELL and SHORT. Sep 15: L (8.61) - 8.30 - Going sideways, but still in a downtrend. HOLD SHORT. Sep 21: L (8.61) - 7.82 - Beginning a major downtrend HOLD SHORT. Sep 27: L (8.61) - 7.47 - major downtrend continuing HOLD SHORT. Aug 28: L Jan 10 calls (1.10) - Stock at 8.48 - Ouch! If these are worth anything, I'd get out, unless you're expecting big news, though there is a lot of time on these guys. Aug 28: MCCC-short (5.85) - 5.35 - Mushy place in the chart to be - Not where I like to short a stock - Given my feelings about the market, I'd HOLD. Good thing you're short. Sep 06: MCCC-short (5.85) - 6.04 - Cresting waveform with a slight uptrend - HOLD SHORT, but be careful, this could run up. Sep 15: MCCC-short (5.85) - 6.35 - Running up here. Still in an uptrend. Approaching my favorite place to short from, but not yet. Sep 21: MCCC-short (5.85) - 6.45 - Post crest and beginning a downtrend, SHORT, SHORT, SHORT. Sep 27: MCCC-short (5.85) - 5.73 - Post crest and in a downtrend, HOLD SHORT Aug 28: MIHL (3.3) - 3.09 - Still in a rising waveform - HOLD LONG Sep 06: MIHL (3.3) - 3.40 - Big pop up on Friday - Still in a rising waveform - HOLD LONG Sep 15: MIHL (3.3) - 3.88 - Still in a rising waveform - HOLD LONG Sep 21: closed position - 4.35 - Still in a rising waveform - HOLD LONG, but watch for crest. Sep 27: closed position - 5.11 - Stock blew up into a spike on Thursday and Friday. Take some profits, and HOLD LONG, but watch for crest. EUROPE FUND Sep 21: IRL (9) - 8.97 - Shallowing after a minor downtrend. This is still HOLD SHORT territory. I would have waited for a buy signal. Sep 27: IRL (9) - 8.72 - MACD is shallowing after a minor downtrend. Bounced off 8.45 for a day. Bullish sign. I would COVER. OTHER FUND Sep 27: BRMIX (11.20) - No chart, no comment RETAIL - Aug 28: GRTS (20.25) - 20.65 - Mushy place in the chart to be, though I am seeing a floor under the stock for the last week - HOLD 1 or 2 Days, Maybe SELL Sep 06: closed out position - 21.19 - Still a mushy place in the chart to be, still has a floor under the stock with a slight uptrend, HOLD 1 or 2 Days, Maybe SELL Sep 15: closed out position - 20.58 - Now the price floor is begining to worry me. No clear signal on this one. Sep 21: closed out position - 19.94 - Showing a slight downtrend in the MACD. Combine that with the price floor and you get a clear SELL signal. First sign of downward trend, SHORT. Sep 27: closed out position - 18.84 - Beginning a downtrend. Go SHORT signal on Wednesday at 19. HOLD SHORT Aug 28: KSWS (19.32) - 18.40 - SELL fast, you're headed to 15. Sep 06: KSWS (19.32) - 17.80 - SELL fast, you're headed to 15 - this went down on Friday! Sep 15: KSWS (19.32) - 18.88 - Bottoming waveform and turning up. Weak buy signal. HOLD if you're LONG. Sep 21: KSWS (19.32) - 21.00 - Weak BUY went to strong BUY 2 days later. Now in middle of strong uptrend. HOLD LONG at least 1 week. Sep 27: Closed out position - 22.06 - Strong uptrend. HOLD LONG but look for crest in the waveform. Aug 28: STZ Sep 30 calls (.4) - Stock at 27.15 - SELL fast, any price. Sep 06: STZ Sep 30 calls (.4) - Stock at 27.88 - Seems to have floored at 27.5. Not a good sign. No way you’re going to make 30.4, unless the whole market roars or this gets hit by lightning. Sep 15: STZ Sep 30 calls (.4) - Stock at 29.25 - Had a great week for you last week. Stock in clear uptrend. White knuckle week for this one. With triple witching, this might (magically) close the week at 30. Still a bad bet. Sep 21: closed position - Stock at 28.41 - Stock never hit 30. Now in beginnings of downtrend. Clear SHORT signal. Sep 27: STZ stock at 23.25 - Stock gapped down this week and became wildly volatile. Major downtrend in progress. HOLD SHORT COMMUNICATIONS SERVICES - Aug 28: NXTL Aug 10 calls (1.70) - Stock at 7.79 - Aren't these expired? or are they Aug 10 of 2003? Stock is Early Cresting waveform same comments as MAXF Sep 06: gone from portfolio - Stock at 7.98 - flat position in a downtrend. I went SHORT at 7.70. Sep 15: gone from portfolio - Stock at 8.29 - Sideways after a crest. Since I'm short I could be colored, but I'd say SHORT. Sep 21: gone from portfolio - Stock at 7.44 - Beginnings of a major downtrend. Still time to short. SHORT and HOLD SHORT. Sep 27: gone from portfolio - Stock at 7.30 - Still in downtrend, but shallowing. Regularly bouncing off the 50 day EMA. Unless it can break through that line, it's going up. I'd COVER Aug 28: SBC (30.3) - 25.81 - Mushy, but there is a trend. I'd say you're headed for at least 22. I'd SELL. Sep 06: SBC (30.3) - 24.00 - Still in a downtrend, but possibly shallowing to a bottoming waveform. Could be ready for a BUY if the general market turns up. Next week is key. Sep 15: SBC (30.3) - 24.55 - Clearly past a bottoming waveform and headed up to sideways. The recent history suggests this up phase could be a head fake. Be wary - HOLD LONG but sell on weakness. I'll be surprised if this breaks 28 by December. Sep 21: SBC (30.3) - 23.20 - Mushy, but beginning a downtrend. I'd say you're headed for at least 20.5. I'd SELL. Sep 27: SBC (30.3) - 20.14 - Made the 20.5 target. Clear downtrend. HOLD SHORT. Aug 28: TWTC (1.18) - 1.09 - Under zero long shelf after a deep dive, kind of like you're under the arctic ice. My favorite place to go long, though I wouldn't go long anything right now. Could be some support at $1.00. I'd guess HOLD. Sep 06: TWTC (1.18) - 1.17 - Under zero long shelf after a deep dive, kind of like you're under the arctic ice. Now showing an uptrend. My favorite BUY signal. If you believe in this company, BUY, BUY, BUY. Sep 15: TWTC (1.18) - 1.22 - Under zero long shelf after a deep dive, kind of like you're under the arctic ice. Now showing an uptrend. Still a BUY signal. Sep 21: TWTC (1.18) - 0.98 - Under zero long shelf after a deep dive, kind of like you're under the arctic ice. Now showing a slight downtrend. Still a long term BUY signal. Sep 27: TWTC (1.18) - 0.92 - Under zero long shelf after a deep dive, kind of like you're under the arctic ice. Now showing a downtrend. Still a long term BUY signal. DEFENSE - Aug 28: PVAT (3.25) - 3.53 - Early Cresting waveform HOLD 1 or 2 Days, Maybe SELL and SHORT Sep 06: PVAT (3.25) - 3.19 - Past the Crest and in the beginnings of a clear downtrend that could last awhile. Clear SHORT signal. Sep 15: closed position - 3.19 - Price flattened, but the MACD is still showing down. HOLD SHORT Sep 21: closed position - 3.15 - Price flattened, but the MACD is still showing down. HOLD SHORT Sep 27: closed position - 3.65 - Price breaking upwards, MACD showed COVER signal on Wednesday at 3.40. COVER Sep 06: RTN (32.84) - 36.31 - mushy place to go long, but in a clear uptrend. HOLD LONG. Sep 15: RTN (32.84) - 35.38 - Crested or flattened, but still in an uptrend. HOLD LONG, but be wary. Sep 21: RTN (32.84) - 33.70 - Post crest and declining. Sell and SHORT Sep 27: RTN (32.84) - 31.18 - In clear decline. HOLD SHORT BIOTECH - Aug 28: IXJ (42.03) - 41.12 - Cresting waveform. SELL and SHORT Sep 06: closed position - 40.34 - Past the crest and in a downtrend - HOLD SHORT Sep 15: closed position - 40.22 - Shallowed and heading sideways - HOLD SHORT but COVER if you see a 3 day uptrend. Sep 21: closed position - 38.87 - Clear downtrend, no uptrend ever occurred. HOLD SHORT. Sep 27: closed position - 39.28 - Short term COVER on Wednesday at 38.5. COVER COMMUNICATIONS INFRASTRUCTURE - Aug 28: OCPI (1.18) - 1.12 - Same comments as TWTC, though you haven't been under the ice as long. You could be waiting 3 months for this to move. Sep 06: OCPI (1.18) - 1.10 - Still sideways under the ice. HOLD LONG Sep 15: OCPI (1.18) - 1.04 - Still sideways with a slight price downtrend. Tough to pick the bottom on this. HOLD LONG but be wary. Sep 21: OCPI (1.18) - 1.01 - Still sideways with a slight price downtrend. Tough to pick the bottom on this. HOLD LONG but be wary. Sep 27: OCPI (1.18) - 0.85 - Still sideways with a slight price downtrend. Tough to pick the bottom on this. HOLD LONG but be wary. Aug 28: RSTN (.91) - .92 - Same comments as TWTC Sep 06: RSTN (.91) - .83 - Still sideways under the ice. Not seeing an uptrend yet. HOLD LONG Sep 15: RSTN (.91) - .70 - Still sideways with a slight price downtrend. Tough to pick the bottom on this. HOLD LONG but be wary. Sep 21: RSTN (.91) - .66 - Still sideways with a slight price downtrend. Hitting 52 week lows. Tough to pick the bottom on this. HOLD LONG but be wary. Sep 27: RSTN (.91) - .56 - Still sideways with a slight price downtrend. Hitting 52 week lows. Tough to pick the bottom on this. HOLD LONG but be wary. Sep 06: WVCM (36.6) - 36.9 - Post crest and in a strong downtrend, but pushing at the 200 EMA support. SELL if LONG, HOLD if SHORT. Sep 15: WVCM (36.6) - 37.0 - Still in a downtrend. Bounced off the 200 EMA and popped up 8%, but now making another run at the 200 EMA. SELL if LONG, HOLD if SHORT. Sep 21: closed position - 37.11 - Shallowing to slight uptrend. Bounced off the 200 EMA again late last week. I think it's going to break down, but chart is not clear. SELL if LONG, HOLD if SHORT. Sep 27: closed position - 33.60 - Broke down through the 200 EMA last week. Chart is in downtrend. HOLD SHORT. INTERNET - Sep 21: EXPE-short (51.78) - 52.85 - Cresting waveform after a rise out of negative territory, my favorite place to go short. You might be a little early, price ceiling at the 50 EMA, need 2 down days to signal a true short. Watch for SHORT signal (1 or 2 days), then SHORT. Sep 27: closed position - 52.85 - Bounced off the ceiling of the 50 day EMA. SHORT signal on Tuesday at 51. MACD in a downtrend. HOLD SHORT Aug 28: ZIXI Nov 5 puts (2.15) - Stock at 3.62 - Mushy place in the chart, though a downturn is developing. My favorite short. I've got 100 shares left that I wasn't forced out of at 5. I originally shorted this puppy at 45. Two days ago I bought these same puts for 1.85. HOLD Sep 06: ZIXI Nov 5 puts (2.15) - Stock at 3.65 - Still a mushy place in the chart, and I was wrong (or should I say I was too hopeful), no downturn yet. Still my favorite short. If this stock hits 4.25+, I’ll buy more Nov 5 puts. But I’m seeing a high floor under the stock price and with Zixi this usually means a pending downturn. I say we take a plunge at the end on next week or the beginning of the week after. Sep 15: ZIXI Nov 5 puts (2.15) - Stock at 3.82 - Slight uptrend, feels like it'll breakdown after options expiration on Friday. Sep 21: ZIXI Nov 5 puts (2.15) - Stock at 3.75 - Cresting with slight downtrend. The financing deal this week makes me nervous, it should cause breakdown of stock but might be used to pump it. HOLD SHORT but be wary. Sep 27: ZIXI Nov 5 puts (2.15) - Stock at 3.81 - Post crest minor downtrend. HOLD SHORT. HARDWARE - Sep 27: BRCD-short (7.8) - 7.83 - Stock in very late stages of a major slide. A little late to short, but still OK. Watch for cover. HOLD SHORT Sep 27: BRCM-short (11.25) - 10.95 - Stock in late stages of a major slide. A little late to short, but still OK. Watch for cover. HOLD SHORT Sep 27: KLAC-short (29.60) - 28.68 - Stock in late stages of a major slide. A little late to short, but still OK. Watch for cover. HOLD SHORT FINAL COMMENT - Dale: after 4 weeks of me saying GO SHORT, you add 5 short positions while I'm saying COVER. We gotta get in sync. You be careful out there Ray