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

To: Return to Sender who wrote (8914)	3/7/2003 8:15:25 PM
From: Return to Sender	Respond to of 95640

SENTIMENT JOURNAL: Bullish Sentiment is Rising? optionetics.com Market Internals: The Dow Jones Industrial Average ($INDU) rose twice and fell three times in the first week of trading for the month of March 2003. The industrial average moved modestly higher on Wednesday and Friday, but suffered sharp declines on Tuesday and Thursday. By the end of the week, the Dow had given up another 150 points. Volume remains light, but market internals have been decidedly negative. On Tuesday, for instance, up volume trailed down volume nearly ten-to-one and the ratio of advancing to declining issues was almost two-to-one negative. In addition, the New York Stock Exchange [NYSE] New High-New Low Index fell from +31 to –112 on Friday, with 184 stocks setting new 52-week lows and only 74 new highs. The stock market continues to see an absence of buying interest and, technically speaking, stocks on the NYSE remain in poor shape. The Nasdaq Composite Index ($COMPQ) also fell in the latest week. The composite index slipped three times and rose twice. In the process, it gave up thirty points, or 2.4%. Market internals remain poor and, even on Friday when the Nasdaq moved higher, up volume trailed down volume and the advance-decline ratio was negative. Volume on the Nasdaq Stock Market remains lackluster as well. Furthermore, for the week, all of the key areas of technology suffered losses. Fiber optics, wireless, and semiconductor stocks were among the biggest percentage losers. Sentiment Data: Despite the ongoing slide in stocks, there is no evidence that investors are throwing in the towel or, to use a worn-out term, capitulating. Sentiment analysis is the constant search for extremes. For example, when investors are excessively bullish or optimistic regarding the outlook for the stock market, they are probably incorrect and stocks are ready for a tumble. On the other hand, when investors are predominantly bearish, pessimistic, or negative on the market, they cannot all be right, and the contrarian will turn bullish. In the latest market decline, the sentiment data has so far failed to produce the type of readings that suggest sentiment has reached an extreme. The contrarian must therefore defer to the most recent trend. The latest activity in the options trading pits is certainly not consistent with market-basing levels of fear. For example, while put activity has been increasing modestly, so has call volume. On the Chicago Board Options Exchange [CBOE] on Friday, more than 550,000 calls traded hands. That was the highest amount of call activity since February 24. At the same time, put volume totaled less than 420,000 contracts and the CBOE put-to-call ratio was .75. This indicator generally rises above 1.00 when market sentiment is bearish. Yet, despite the fact that the industrial average has fallen six times in the past eight weeks, the indicator is not rising above 1.00. Meanwhile, the index put-to-call ratio continues to give disconcerting readings. During the past seven trading sessions, it has produced an average reading of only 1.05. This indicator suggests that investor sentiment is overly bearish when it rises above 2.00! In short, the CBOE index put-to-call ratio is nowhere near market-basing levels. Surprisingly, the latest surveys of newsletter writers are showing increasing levels of bullish sentiment. According to the latest poll by the American Association of Individual Investors bullish sentiment rose to 33.33% from 26.02% and bearish sentiment fell to 39.39% from 47.15%. Meanwhile, Investor’s Intelligence reports that bullish sentiment rose to 41.6% from 40.4% and bearish sentiment increased to 38.2% from 36%. Stocks are falling across the board and the investor surveys are showing rising levels of bullish sentiment? That trend is at odds with what we would normally expect. It also suggests that the latest market decline has not spurred the type of negativity or pessimism that can serve as a foundation for a legitimate market advance. optionetics.com Click link for tables and additional commentary. RtS