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To: kemble s. matter who wrote (65336)	9/13/1998 5:42:00 PM
From: FR1	Read Replies (1) \| Respond to of 176387

Some good news: mediacentral.com

To: kemble s. matter who wrote (65336)	9/13/1998 6:22:00 PM
From: Bruce Ravelson	Read Replies (2) \| Respond to of 176387

Could still be awhile before we can relax and enjoy the ride. The following are comments made by Victor Weintraub, at Firstcap.com NOTICE: Victor Weintraub will be on CNBC on Monday, September 14, 1998 between 3:30 and 4:00 PM Eastern time. September 12, 1998 SHORT TERM RATING: 5 UNATTRACTIVE INTERMEDIATE TERM RATING: 5 UNATTRACTIVE A Snap back rally but still a Bear Market. On Tuesday morning, after strong rallies in markets overseas, the Stock Market gapped higher on the opening and moved up all day. The DOW was up a record 380 points on Tuesday. On Wednesday and Thursday the market gave up all of the Tuesday gain and then some and rallied again on Friday. The point and percentage moves in the various indexes have been extreme and the volume has continued to be heavy. For the holiday shortened four day week the DOW gained 2.03%, the S & P 500 gained 3.61%, the NASDAQ gained 4.8%, the S & P Mid Cap gained 2.97%, the Wilshire Small Cap gained 1.99% and the Russell 2000 gained 1.89%. The Advance-Decline Line was OK on the Tuesday rally and then lost considerable strength later in the week. The A-D daily average was positive by only 43 issues, not good for a week that showed sizable percentage advances in the averages. New lows continue at disturbingly high levels. On the Tuesday rally there were 124 new lows, that on a day with a gap up opening and strength all session. There were 515 new lows on the Thursday sell off and new lows averaged 303 daily. Recognize the significance of that 303 number; about 8.5% of all stocks that traded each day made a new low. New highs averaged only 19 daily. Volume continues to be very heavy and averaged over 800 million shares each day. The big Tuesday rally was apparently a snap-back from a very oversold condition and no meaningful progress has been made to a recovery from the recent declines. Watching the price swings and volume it is as if the market is having convolutions. The market continues to be very oversold, but that is what a Bear Market is all about. Of the 78 MARKET SEGMENTS that I track only 2 are positive (rated 2) 33 are neutral and 43 are negative (rated 4 and 5). The FIRSTCAPITAL OSCILLATOR (FCO) is at 5, the same as last week. The Inflection Line is at 12, up from 3 last week. Small changes in the indicators at these low levels are not significant. The FCO is negative and flat at a very low level indicating a continuing strong down trending market. I keep separate oscillators for the stocks on the NYSE and the NASDAQ markets. The FCO for the NYSE is 7 while the FCO for the NASDAQ market is 3. The implication is that the small cap stocks remain weaker than the large caps. So much for last week's hope by some for a recovery in small caps. The Put/Call ratio is 0.83 and the Put/Call ratio for the OEX is at 1.01, almost a negative. The P/C ratio for the OEX was 0.90 on Tuesday, a negative before the Wednesday and Thursday sell off. The Option Volatility Index (VIX) is at 44.09, almost unchanged from 44.61 last week. It has not moved down as the averages moved up, a negative. There were high negative ticks several times on Wednesday and Thursday but support seemed limited. There were high positive ticks in the first and last hours and a high closing tick on Friday, some resistance. The short term emotional indicators are negative. It appears to me that the rally of last Tuesday, although large in point change was nothing more than a counter trend recovery from over sold that has now lost any power that it had. The underlying direction of the market is still down. The FCO is negative, market internals are very weak, there are no market leaders and no basing patterns apparent yet, and the market seems to not be able to recover from a chronic oversold position. There could be a continuation of the Friday rally on Monday, but if it does happen I do not expect it to go anywhere much. The market will penetrate support around DOW 7400 and accelerate down. Fundamentals remain a problem with many of the super cap stocks still at high price earnings multiples and earnings warning season here. Strength in the Bond Market has not and will not help stocks. Have you noted the relationship: when stocks are down, bonds are up. The market remains sensitive to events taking place overseas. I expect the Japanese market to penetrate support. The NIKKI fell 5.1% on Friday and closed at 13,916.98. After the close the government announced that GDP declined in the second quarter by 3.3% annualized. When the Japanese market has a large decline it will be a further negative for our markets as well as other world markets. Do you remember when the NIKKI was 40,000. If you are a speculator or trader I think you should only look for opportunities on the short side. My advice to intermediate and long term conservative investors is that the market is still very highly priced and over extended and we are in a BEAR MARKET. What we are seeing is contraction of very high price to earnings multiples. Prudence dictates the sidelines for those concerned with capital preservation and those who are cognizant of risk verses reward. This is a high risk and expensive market. If you are still in the market you would be prudent to consider a hedge position. A little insurance is worth the cost in times of high risk. The CONSERVATIVE INVESTOR STRATEGIC ASSET ALLOCATION is as follows: BONDS 50%, STOCKS 0%, CASH 50%. Cash means short maturity bonds (under two years). It is worthwhile to note that this asset allocation is now outperforming all of the indices for the past 12 months and the year to date. ------------------------------------------------------------------------ victor@firstcap.com Copyright c 1998 FirstCapital Corporation