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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (7872)	4/26/1998 1:09:00 PM
From: Lazlo Pierce	Read Replies (1) \| Respond to of 18691

Roger and all. Just an FYI. The H&Q tech conference gets under way Monday AM. This in the past has given a pop to many stocks presenting. You might want to check out the list of presenters at thestreet.com for the complete list. Approx 60 per day thestreet.com Mon/Tues thestreet.com Wed/Thurs Dave

To: Roger A. Babb who wrote (7872)	4/26/1998 1:20:00 PM
From: Bald Man from Mars	Read Replies (1) \| Respond to of 18691

<<BM, I celebrate with buttermilk.>> Are you sure buttermilk is a MAN's drink ... If my portfolio does not do better next week, can I send some deniro to you so that you can manage it for me, what is your management's fee, and what is your minimum. I am tired of losing my deniro !!!

To: Roger A. Babb who wrote (7872)	4/26/1998 1:21:00 PM
From: Lazlo Pierce	Read Replies (1) \| Respond to of 18691

Interesting TA view on thestreet.com *********************************** The Chartist: Shopping at Home and Other Signs of Trouble By Helene Meisler Special to TheStreet.com 4/24/98 10:50 AM ET In the late '80s they said the retailers were going out of business because we would all stay at home watching our cable TV and shopping through the Home Shopping Network. For those of you who need a refresher, Home Shopping Network was the hottest stock in late 1986 because of this view. If my memory serves me correctly, it came public around 3 and rose to 40 or 50 in a day or two, or maybe it took a bit longer in those days, but it soared. Here's a two-year chart of HSN from Jan. 1, 1987, through Jan. 1, 1989. Unfortunately I cannot seem to extract data from before that time to show you the rise from its inception in '86, but you can see the end of the huge run of HSN in early '87 to a high of 47. That was followed by a huge decline to 3, where the stock languished for years. K-tel (KTEL:Nasdaq), which brought us the original home shopping experience by selling its records on late-night TV, is this week's HSN. Just because K-tel's decided to sell its records (oops, sorry, CDs) via the Internet, market players want to own the stock. Now, K-tel may succeed, but I ask you, when was the last time you bought anything from Home Shopping Network, or even QVC? This speculation is just one of the many signs that it's time to take some profits off the table. While speculation is more anecdotal than statistical, it is often a sign of a market top. The actual statistics have even begun to show a trend, rather than simply sloppy market action. We've been writing about the paltry number of stocks making 52-week highs, but the number of stocks making 52-week lows yesterday (37) was the most we've seen since the lows in January ... and that's when the DJIA was trading at 7900! Imagine how many more stocks would make new lows if this market sold off a few hundred points! That's not good individual stock action. In case you think "it's just one day's action," note that the 10-day moving average of new highs minus new lows has been declining since mid-March. That's a trend. A few weeks ago we showed a chart of the cumulative advance/decline line, noting that it had failed to make a new high along with the averages. We were at Dow 9000 then; we have since taken a trip to 9200 and the cumulative advance/decline line has gotten worse, not better. In fact, it is currently trading at a level not seen since mid-March. That's a trend. There's also the McClellan Summation Index, which is based on the advance/decline statistics as well. You can see the peak in mid-July last year (point A); three weeks later the DJIA peaked and fell about 700 points. Then in late September this indicator peaked again (point B). This time it took the DJIA two weeks to halt its rise, which in turn led to the big October decline of about 1500 points. The peak in the indicator this time came in late March (point C) and yet the DJIA has not yet stopped its rally, or has it? There is obviously no exact timing to this indicator; however, we can say that it catches a trend with very few false signals. The trend is down. Lastly, a discussion on the equity market would not be complete without a look at the bond market. About a month ago we took a look at the chart of the yield on the 30-year Treasury bond as it crept through 6%. We pointed out that the bottom was small but developing. Here's another look at that chart, updated through Thursday's action. See how the big, one-year downtrend line has been broken to the upside? I still believe this bottom is quite small and may require more backing and filling, but a chart like this cannot be ignored. This is not a positive for the equity market. Thus far the decline in the individual stocks has been fairly well contained. We have seen some stocks show early signs of rolling over but nothing broken yet. Right now investors are selling without much enthusiasm. No one's compelled to hit the bid just to get out. That typically comes after we are well into the selloff, which is also when the stocks start to break. With that in mind I have made a short list of "break" levels on certain stocks. Breaking these levels should bring out some real selling. Coke (KO:NYSE) at 73; GM (GM:NYSE) at 66; Philip Morris (MO:NYSE) at 37; Bristol-Myers (BMY:NYSE) at 100; and Oracle (ORCL:Nasdaq) right here. Other stocks showing up on my negative list include JC Penney (JCP:NYSE), which appears to be early in rolling over. Fannie Mae (FNM:NYSE) should hold 56 on this first dip down. Best Buy (BBY:NYSE) continues to look vulnerable to a severe bout of profit-taking. And finally, Sun Micro (SUNW:Nasdaq) can't seem to rally on good news (earnings, restructuring), which makes me wonder what happens if we come into some bad news? There are still some stocks on the positive side of the ledger, but I write them down with little enthusiasm. They include Air Products (APD:NYSE), Nucor Steel (NUE:NYSE), Halliburton (HAL:NYSE) and Schlumberger (SLB:NYSE). As a bit of final anecdotal evidence of how late we are in this game, the last time Bank of New York (BK:NYSE) felt comfortable enough to go shopping for another bank, it made a bid for Irving Trust ... in early October 1987. Dave