energyplay, the Weekly Market Monitor on Nightly Business Report agrees with you and the timer you refer to:
nbr.com
11/01/2002: Market Monitor-Douglas Jimerson, President of National Investment Advisors
PAUL KANGAS: My guest Market Monitor this week is Douglas Jimerson, president of National Investment Advisers, a money management firm based on Potomac, Maryland. And welcome back, Doug. It's nice to have you back in hour studios again.
DOUGLAS JIMERSON, PRESIDENT, NATIONAL INVESTMENT ADVISORS: Thank you so much, Paul.
KANGAS: During your many market appearances over 10 years, actually, for the first time this past May you began turning bearish on stocks. And actually it was two years prior then that you began --
JIMERSON: Yes.
KANGAS: But this past May 3rd you were just super bearish. The Dow was at 10000. You said 7,500, maybe lower. Needless to say, we got some e-mails questioning your mental acuity. But it turned out you were right. But now we've had a nice rally. We've seen the bottom, haven't we?
JIMERSON: I don't think so. You know, it's really unfortunate, but the trend is still negative. And if you follow the trend, as we do with my firm, the trend is your friend.
KANGAS: Well, the trend has been up for four weeks, and pretty impressively.
JIMERSON: We look at a very long-term trend. I like a 200 day moving average. So if you look at the price action over the last year, what we've seen is a series of lower highs and lower lows, the high in March, the lower high in may, the lower high in August. And now I think we're finishing off another lower high.
KANGAS: So we're going to go down and test the old low and then rebound, is that it?
JIMERSON: Unfortunately, I think we're going to make new lows.
KANGAS: How low?
JIMERSON: Well, this is an environment where we need some sort of a washout. We have not had a satisfactory washout in this market.
KANGAS: You want that capitulation day on eight billion shares and down a thousand points?
JIMERSON: No one will ever want to hold another stock. No one's going to want to give a stock recommendation when it's over. But even if it can't end in the next several months or a year, I think we could have some sort of watershed event that would take the Dow down another 3,000 points --
KANGAS: We're talking 5,500?
JIMERSON: We're talking 5,500.
KANGAS: Wow.
JIMERSON: And the Nasdaq at 800, and possibly we could have a low, an important low that would provide an opportunity for next year to have a big rally.
KANGAS: Well, you didn't give us very many recommendations last May 3rd. You said if you have some defense stocks like Lockheed (LMT), General Dynamics (GD), Raytheon (RTN), stay with them. They did go up a little bit after you were with us and now they're a little bit below where they were. You still with them?
JIMERSON: I think you can hold some of those stocks. I still think the defense area is one of the most interesting to hold, and also the energy stocks. You get a good dividend there.
KANGAS: You liked a few them, Chevron (CVX) and Exxon (XOM), even though they're lower now than they were.
JIMERSON: They're lower.
KANGAS: But they pay dividends.
JIMERSON: That's right. And with our timing service, we got out of energy stocks and funds in July.
KANGAS: I noticed.
JIMERSON: Now, I would say, as I said before, cash is king. Cash is king today. Hold your powder for the opportunity that may be coming within the next three to six months.
KANGAS: And you think it's going to be a day of capitulation, huge sell-off?
JIMERSON: I think so. And I think that what we are looking for is an opportunity that's four to six months in length because that's the only kind of rally that you can sustain.
KANGAS: So I assume you have no "buy" recommendations for us at this time?
JIMERSON: Not at this time. In fact, bonds look bearish, precious metals look bearish and the dollar looks bearish. Paul, that's part of the problem with our market is the dollar is weak.
KANGAS: So this recent four week rally, as impressive as it was, really means nothing to you?
JIMERSON: I believe it's a trap.
KANGAS: Oh, boy. Well, still bearish, really bearish, 5,500. It's hard to believe.
JIMERSON: But that will provide an opportunity, and I think that investors should be prepared.
KANGAS: OK.
JIMERSON: Keep their cash dry for now.
KANGAS: All right. Doug, we'll be watching closely. And we hope you're not right, but you've been so right so often recently, we'll have to pay attention. Thanks very much. |
