Hello Margaret: More than anyone else, 'you' above all deserve the honor to submit the 20,000th post. As resident 'Welcomer-in-Chief', PR sec and 'Go Intel' Cheerleader, you've more than earned your stripes!
Congratulations to you, Frank and everyone for contributing to its ongoing success.
As you may have read, the other day I posted a transcript from my 'Financial Intelligence' Email report alluding to the fact that I was expecting a very strong rally to develop, in sharp contrast to many of those who were expecting a further correction. Seeing as much of the info is still valid, I thought appropriate to post one of my follow-up reports.
Whilst I would not rule out a correction over the next day or two, (if the Fed raises rates, we'll get a big one), beyond that I think the markets could come back strong. If Intel can break out above 75 - 80 level, I would expect a very strong rally through new highs to develop. I feel the same way about Sun and Compaq. In contrast to the most massively bullish US Treasury Bond sentiment in the history of the World, I am beginning to see strong indications that Bonds are topping out, ie. interest rates are in a bottoming out process.
Here is a transcript from one of last week's report indicating that we are in the throes of a monster rally which I believe will permeate throughout the World's markets, including Asia. See comments below.
The biggest surprise right now would be a huge rally in Japan, which would help lift the rest of Asia. Technically, this market is beginning to look explosively bullish. The Yen in all likelyhood has put in a major interim low at these levels. I still like Gold around these prices.
SPECIAL REPORT - Further to last weeks comments in my Financial Intelligence report, we already have:
A Monster Rally, already in Progress...
Last week I suggested that a penetration of the 1118 level in the September S&P Futures contract, could usher in a monster rally. I know most people doubted the probability of that happening, but all the early indications were evident which were especially capped off when many noted analysts continued to announce that they were still looking for a further correction...Usually a reliable confirmation that the 'real' bottom is already in.
As I previously explained in my 'Always bet on black' report, (if anyone would like a copy of this report, I'll be happy to post it), the incredible display of strength in the broadest sector of the market, most notably the 'highly speculative, avoid at all costs' (as continually cautioned by the so called 'investment elders' of Wall St), Internet Index has been soaring to new record highs for 8 days straight, closely followed by the broadest of all measures, the 'allegedly' out of favor OTC, (over the counter index). Although the Nasdaq has yet to make new record highs, its ultimate destiny to new records seems assured, because the Nasdaq Futures attained that status three days ago. When futures lead cash prices to new highs, you are dealing with a very powerful situation, plain and simple. It just doesn't get any better than this. It's awesome.
In a way the futures of the S&P 500 and Dow are delivering the same message right now. The large cap stocks have already been outperformed by the 'virtual futures' in the form of the OTC and Internet Index.
The S&P's premium of futures over cash is running at an unprecedented all time high level. And today something even more magical and extraordinary took place: The Dow Jones September Futures contract literally soared at the close of trading to close with almost a 100 point premium over the Dow, to settle at 9035 and is now trading at 9048, a 113 point premium. I believe this huge closing premium is absolutely without historical precedent and unless they repeal the laws of technical analysis, signal extremely sharply higher prices ahead. The fact that the Dow Futures closed back over 9000, (at 9035), compared to a Dow Jones Industrial Average close of 8935.58, implies the Dow is about to make another assault on the 9000 barrier. And once again, unless the rules of technical analysis are re-written, the Dow has to make new all time record highs, before this bull is dead and frankly this bull have gotten a new life, or a heart transplant or something following a near death experience, because these markets are pumping and the enormous liftoff power from this rotational correction, resembles the end of 1994 and April 1997 rolled into one and jam-packed with double the liftoff power right now.
When leaders lead the rest will follow:
The leaders have shown the way. Now, I believe the second and third tier stocks and other undervalued stocks will begin to catch up in the weeks ahead. Why, because this is what tends to happen following each leadership inspired blast off from the lows of any prolonged corrective period. Also, I would have to say, that in light of the broadbased strength of this liftoff, it would not suprise me if Nasdaq 2000 plus and Dow 10,000 plus are the ultimate destiny of this new bull run. Again conventional wisdom says, that because the market has gone up 20 - 30 % three years in a row, it is incapable of equaling or exceeding that amount for an unprecedented 4th year. I don't buy that for a minute. The market will go where it wants to go and right now it wants to go up with no respite in sight. This market has continually confounded some of the smartest minds the World has ever known and it did it in fine style again this week. You've got to understand that the rocket fuel that drives these huge rallies is 'investors being wrong', ie short the market or in puts and basically being forced to buy back their positions at increasingly higher prices and therefore increasingly greater losses.
If you don't believe me check this site and see how many millions of shares people are short in these issues. Not only that, but note how in general the amount of short positions has been increasing in recent months. Judging by that the fact that the average short positions in these stocks range from 5% - 10% of the outstanding capital, you don't have to be a genius to figure that the losses in Microsoft, Amazon, Mindspring, AOL and Yahoo were simply astronomical this past week. But this is not the only reason stocks went up.
viwes.com
Two weeks ago, amidst a considerable amount of correctional gloom, I wrote an extensive essay entitled: 'The Next Great Growth Wave, wherein I highlighted the potential for the next wave of growth could be even more powerful than the last, ie: The Windows 95 inspired growth wave that has powered the last three years.
Whilst Windows 98, again misguidedly maligned by the critics, just as Windows 95 was, in of itself may not propel this growth wave of its own volition, it's catalytic potential is enough to set things in motion.
Designed to integrate with the next generation of processors, video streaming, extended memory, multiple monitors and high speed internet access, this will become more and more, a must have product, if alone because of its seamless integration with Pentium II and Internet Phase II and all it will have to offer.
Whilst I expected this growth wave to be powerful, the explosion in high tech stocks is more than validating this idea. I am beginning to understand why. In my previous article, I pointed out the obvious economic benefits of declining technology price spiral, which, in an atmosphere of greater prosperity and growth in affordability Worldwide, means the potential of obtaining must have, up to the minute products with the attendant two, three or even four times the bang for your buck as in previous cycles, it is not hard to foresee each family member having their own PC in each room of the house all networked together and wire to the World Wide Web. It will no longer be the Family or Dad's computer of year's past. And there will be a host of peripheral devices to plug in. In addition, the real gains in efficiency, productivity and entertainment stand to be made from what I would describe as the 100 fold factor, where this growth wave could usher in performance gains as much as 100 times the current standard.
We already have that kind of performance evident in today's computers over the original 8086 model of 1980.
Today we can buy a computer 100 times as powerful for one tenth of the price. Next, DSL technology could usher in internet access 100 times as fast as the current standard and the new generation of giga memory chips will enable 100 times the amount of memory as the current standard. Waiting in the wings, but little talked about are the potential breakthroughs announced last year, that could enable performance increases in processing power of up to 100 times the current standard much sooner than anyone ever dreamed including Gordon Moore, putting his 'Moore's Law' invention into a parabolic upswing arc way beyond the current curve of a doubling in processing power every 18 months that up until now we have been more or less tracking quite accurately.
So maybe all this is why the markets have suddenly gone 'topsy over technology'.
'Asia could be the biggest surprise'!
Conventional wisdom is that Asia is a basket case and will take years to recover, but the biggest surprise could be an earlier than expected recovery. Even with negative growth, there are still around 3 Billion potential consumers in Asia who are more prosperous than at any time in history, excepting last years setback. There is the exact same despondency over Asia, as there was with Mexico in 1995. Against all odds, Mexico staged one of the greatest economic miracle turnarounds ever, in spite of a battered currency. There is more prosperity and employment today than in Mexico's entire history. US products, especially cell-phones, cars and sport utilities are everywhere.
In my view, China holds the key to the Asian recovery. It is going to replace the Japan as the economic engine of Asia and it will be sending out economic lifeboats to all the shipwrecked Asian economies and consolidate its new economic power and status in the process. During this historic time of the President's state visit to China, we are catching glimpses of a new world of transformation and growth that is hard to comprehend even in comparison to the accomplishments of our own incredible era of growth and prosperity.
The boom in China is absolutely unprecedented in it's own accomplishments and in all likelyhood will continue to accelerate to the point of being unstoppable. I definitely would not underestimate this region's potential for a faster than expected recovery. If Mexico can do, the canny traders of Asia certainly can too.
Meanwhile, back on the Eastern Front, Europe's emerging boom is anywhere from five to ten years behind the US in terms of restructuring and employment creation. The same can be said of Latin America. With 400 million consumers in our hemisphere hungering for U.S. Culture, status and products, this is an awakening Giant that cannot be discounted. Prosperity is accelerating everywhere, just as it is in Eastern Europe and Russia. The markets are sending us a message. The have correctly forecast the economy thus far and with today's report of 5.4% growth in the first quarter, this is just what the doctor ordered to convince that market that all is well and shake it out of its recent slump.
So far the performance has been scintillating!
Rgds to all
Wiz
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