READ THIS. Nightly Business Report transcript from tonight with reference to Rambus.
"Market Monitor"-Mark Lebovit
PAUL KANGAS: My guest market monitor this week is Mark Leibovit, editor and publisher of the "Volume Reversal Survey," who comes
to us tonight from Phoenix, Arizona. And welcome back, Mark.
MARK LEIBOVIT, EDITOR & PUBLISHER, "VOLUME REVERSAL SURVEY": Thanks, Paul, thanks for having me.
KANGAS: Your method of stock market forecasting relies strongly on the theory that changes in trading volume proceed changes in price.
So, the obvious question is, have you been seeing any revealing signals along that line?
LEIBOVIT: We sure have. You know, back in the early part of the year, we had eternal divergence in the market and negative volume.
Back in early February ...
KANGAS: That's right. We have a chart that shows that, as a matter of fact. This is your chart, and back on the 4th of February, you were
already worried, weren't you?
LEIBOVIT: Sure were. And you know, the whole point that we've been in a bear market is so obvious when you look back at what's been
happening here since February. And basically, we've been in a down trending pattern internally. This oscillator combines both volume and
advance-to-declines.
KANGAS: Well, how 'bout that breakout there in the midsummer, in late June?
LEIBOVIT: That was a false breakout. And here we are, right back to new lows again.
KANGAS: Not a good sign.
LEIBOVIT: Not a good sign. And in many ways, it mirrors to a lesser degree of what we saw in 1987, where you had a similar pattern and
the market failed. And then you had a bigger sell-off. So, still a bear market according to this indicator. But if you look at the very right, it
looks like we're trying to bottom here. So we have to watch carefully.
KANGAS: Well as a matter of fact, you have your annual model forecast. We have a chart of that. Let's have a look and see what that looks
like for the year. There was the spring and early summer drop, well-pictured there by May 8 at the bottom. And then, an improvement
gradually. Actually, we're in trouble now here in August and your chart doesn't look that bad, does it?
LEIBOVIT: It basically portrayed the year as a very choppy year, Paul, with a downward bias into midyear. I was accused of being too
bearish. And at the same time, the previous chart was telling us we were going down internally. It does say that we could have a year end
recovery. But if you look at it carefully, it says we may not be out of the woods until early October. So I'd be careful until we get the
advance/declines improving, until we get up side volume. And even though there are a lot of contrary indicators out there, we can talk about
those. Such as the fact we're already down a 1,000 points from the high. The fact that you got a Ralph Acampora sell signal. The fact that we
hit the 200 day moving averages. There are all these things that say, maybe we should be looking for a low here.
KANGAS: You think Acampora was a little late with his "sell" signal?
LEIBOVIT: No question about it. The model, you know, we were bearish February-March looking at what was happening. Of course, you
had the Super Bowl indicator, too, Paul. So, everything was working.
KANGAS: That's supposed to make it a down year, isn't it.
LEIBOVIT: It sure does. And it makes-it worries me a little bit because, you know, we were supposed to bounce at the year end. Now the
question is, where are we going to bounce from? Is it from here, or are we going to drop to 7800?
KANGAS: All right. And not only that, but what are you going to buy that's going to bounce, Mark? Right now?
LEIBOVIT: Well, you know, we put stuff out in our vrsurvey.com Web site, Paul. But, you know, here are some of the ideas. We like
Power Integrations (NASDAQ:POWI). We like Little Acorn which we recommended back in February, AKRN.
KANGAS: That's right. You recommended it at 4, now it's around 5 3/4.
LEIBOVIT: Went to 10. Back to 5. Still looks good. FORE Systems (NASDAQ:FORE) looks good. I like Rambus (NASDAQ:RMBS). I
think that could be a 70 or $80 stock again. Micro Warehouse is on a run here, MWHS. That could run into the 30's.
KANGAS: But these are just "short term" recommendations, right?
LEIBOVIT: "Short term." We are a trading service, one to three days. For example, today we were short two stocks, DoubleClick
(NASDAQ:DCLK) and Platinum (NASDAQ:PLAT). Took 3 point profits and ran. So for those who are looking for the short term, that's
what our Web site vrsurvey.com is about. Then our hot lines.
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