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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (8346)	2/1/2003 5:47:48 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95748

SENTIMENT JOURNAL: Indicators Turn Mixed as Stocks Edge Lower , Frederic Ruffy biz.yahoo.com Market Internals: Stocks moved up and down almost like a yo-yo in the latest week of trading. The Dow Jones Industrial Average (^DJI) rose three times and fell twice. The point gains during the three winning sessions were not enough to offset large point losses Monday and Thursday. As a result, for the week, the industrial average lost another 80 points. The Dow has now fallen in eight of the past twelve trading sessions and suffered an 800-point loss during that time. Meanwhile, market internals on the New York Stock Exchange [NYSE] have been extremely poor when the industrials fall. For example, on Monday and Friday, the ratio of up-to-down volume and the advance-decline ratio were both extremely negative (see table above). At the same time, the NYSE New High-New Low Index was negative throughout the week, which means that there are more stocks d of recording new 52-week highs. Overall, then, although the Dow did advance on three occasions, market internals continue to paint the picture of a weak market and it is fairly evident that the bear has seized control of stocks once again. Trading on the Nasdaq Stock Market has been even worse. The Nasdaq Composite Index (^IXIC) fell during three of five trading sessions and gave up twenty points. Market internals were negative on Monday, Thursday, and Friday. While there was a modest improvement in the Nasdaq New High-New Low Index (-6 instead of last week's –56) as the week progressed, it remains negative. Biotechnology, semiconductor, and computer stocks weighed down the Nasdaq in the latest week of trading. Sentiment Data: Bearish sentiment continues to rise as stocks move lower. That trend has been in place for three weeks now and there are very few reasons to expect it to change. For one, market internals are not particularly encouraging and technically the market appears weak. In addition, while bearish sentiment is rising, it has not reached levels that might be considered consistent with capitulation or the type of psychology that occurs at a market bottom. For example, the latest survey of newsletter writers conducted by Investors Intelligence shows that bullish sentiment remains unchanged at 50% and bearish sentiment has fallen from 28.3% to 26.1%. Those numbers should be flip-flopped (i.e. more bears than bulls) if the market was approaching a fear-based bottom. Therefore, it is possible that bearish sentiment will continue to rise until the market enters another phase of capitulation. This can occur over a period of weeks or days. Regardless, there will be some indicators to watch for signs that nvestors are throwing in the towel or capitulating. First, trading volume on the exchanges. While stocks have been falling, volume has been relatively light. In addition, while most of the weakness has been in the technology sector during the latest decline, volume on the Nasdaq has been less than on the NYSE during four of five trading sessions last week. Generally, there is more volume on the Nasdaq Stock Market. Going forward, one sign that the market is capitulating would be a series of high turnover days where volume approaches 4 billion shares between the two exchanges-and that a majority of the volume occurs on the Nasdaq. Another sign to watch is the market's so-called “fear gauge”-the CBOE Volatility Index (^VIX). It surpassed 40% on Monday. If it rises to and then closes above 40% level once again, it probably means that VIX will continue to move higher and hit 50%-this indicator rarely stops at 40% when it breaks that level. VIX at 50% has been a high water mark that has signaled market bottoms. The CBOE put-to-call ratio gave bullish signal of 1.02 on Monday. A reading above 1.00 is generally a sign of extreme pessimism and a reason to be bullish. However, one isolated reading is not enough to turn the tables. Instead, several readings over 1.00 within the course of a couple of weeks is generally a sign of market-basing activity (see Index Intelligence: Excessive Pessimism? Not Yet, 1-31-03, for more on the CBOE put-to-call ratio). Finally, the recently reliable Put Volume Indicator [PVI] has not produced any readings consisten r market-basing conditions lately. In fact, it fell to .69 on Tuesday, which was its lowest reading (excluding the December 25th holiday period) since late-November. When PVI spikes higher and approaches 2.00, it could be a sign that investors have capitulated once again and the end to the market's latest decline is growing near. biz.yahoo.com Sorry Gottfried as far as I can tell the AAII Survey is useless. Until it can be put on a chart or show data that suggests that it will work as well as the newsletter writers investment survey they there is no good reason to even discuss it. Anyway, I am not confusing the two. I'm sorry but lets talk about what works. Not what is meaningless noise. RtS