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If you look at a 10 year chart of the NASDAQ, you can see that we have just
about corrected to the uptrend that was in previously place. We are bound
to see some profit-taking tomorrow. One Guy on the Metastock list is up 30%
in the last 3 days on stocks. I closed out some profitable positions near
the top today also.
http://www.bigcharts.com/quickchart/quickchart.asp?symb=%24compq&sid=0&o_sym
b=%24compq&freq=2&time=13
Ralph Block was on Business Center Tuesday and said that looking back over
the historical TRIN, he found 12 instances where the TRIN was greater than
2.0 one day (extreme pessimism) and less than 0.5 the next (extreme
optimism). In every case, the market resumed an uptrend shortly thereafter.
On Friday, the TRIN according to Block was 4.81 and on Monday it was 0.38 (I
think, may be wrong here).
Many stocks have had their P/E's cut thoroughly and hopefully the money that
continues to pour into the market will go into some of the lower P/E stocks.
I think the S&P P/E is still over 100 though, perty espensive. Earnings
seem to be coming in strong so far this quarter. There is supposedly $1
trillion coming out of the Japanese Postal Savings. That money will have to
go somewhere. The Nikkei has been strong for the past 18 months, but with
interest rates in Japan still closer to 0% than our prime rate, our markets
are bound to get some of that.
Also, I've recently noticed a number of people saying that as long as the
dollar remains strong, our markets will also. Japan has repeatedly
demonstrated in words and deeds that they will not allow the yen to get too
strong and the euro is continuing to sink though at times it does show
glimmers of strength. I recently heard that there was a pissing contest
between Larry Summers and some European monetary wonk about who had the
bigger bubble: them or us. I hadn't heard that there was a European bubble.
Anyone know anything about this?
It's hard to say bullish reading Fleckenstein everyday. He has a link to an
article recently posted by Grant's Interest Rate Observer. It predicts that
we will see another crash on May 4 when the Productivity number comes out
because it won't be nearly as strong as it was during the last 2 quarters
which they think were artificially boosted by Y2K efforts.
http://www.siliconinvestor.com/insight/contrarian
I say we stay moderate to strong thru the summer and see what happens in the
fall.
Kent
-----Original Message-----
From: Layne Hermansen D.O. <lahermansen@xxxxxxxxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Wednesday, April 19, 2000 7:44 PM
Subject: Market Direction - Nasdaq - personal commentaries
Where are we headed? That's the question everyone is asking more so now.
On the Chart, it looks like we just experienced the bounce rally from the
second leg down.
Question going through my mind is when we start the third leg down, how far
we
going? It looks like we have some support at 2861, which should give us a
nice bounce
off that. But if the general population starts pulling money out of 401ks,
we'll most likely
return to the 10 year trend line, Naz 1800, but with inflation, would put
us near 2200-2400.
That is a bullish trend line for the long term and it looks like all major
decade rallies take off
from that line as well.
The third leg down, if it happens, isn't going to be pretty. I liked what a
NYSE floor trader
said, people will soon find their 401k's turning into 201k's. And for
those who watch
the Etrade commercial, that guy will be cured of money coming out of his
waazzzooo!
The stocks I follow going up, are going up on little volume. Where are the
buyers for follow through? Sure there's traders, but they are not acting
commitedly and are jumping out on any sign of weakness. Smells like a BEAR
TRAP.
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