WELCOME TO STOCK MARKET DIRECTION

Steve Zito is a stock market technical analyst who also uses fundamental economic analysis to forecast the general direction of the stock market. The views stated herein are his opinions only, and should not be relied upon as advice for investment decision-making. If you have a specific question use the short survey form.
Coming soon! The NASDAQ page. ALL LINKS ARE AT BOTTOM.

INDUSTRIALS INDICATORS
THE STANDINGS

Five of seven indicators are neutral
April 3, 2000

The Dow Jones Average
CHART INDICATORS

APR 4 NEWS FLASH
DOW FALLS 504 POINTS TO 10,718
EXIT DOW PUTS
WITH A HUGE GAIN!

5-minute chart
Neutral
support 11,028

15-minute chart
Neutral
support 11,026

30-minute chart
Neutral
support 11,014

60-minute chart
Neutral
support 11,010

Daily chart
Neutral
major support 10,705

Weekly chart
Neutral
major support 10,677

Monthly chart
Positive
major support 10,010

Model Portfolio

******************Commentary*******************
The Dow made a powerful price move today to the highs set March 23. The Dow had dropped 341 points in six days. Today, it rose 300 points in two hours. This is a momentum driven market, and the volatility is heating up. When 4 out of 7 chart indicators said sell on March 23, the Dow's late winter 14% advance ended. Five out of 7 indicators were negative last Friday, with the 60-minute chart giving a sell. This morning, every stock market futures index pointed to sharp price declines. Indeed, the NASDAQ suffered its worst one-day plunge in history. But the Dow strangely soared, as the $1.1 trillion of market cap that sold out of NASDAQ went into bank, drug, retail, and tobacco stocks in the Dow. Will it last? Maybe a week. The Dow is very near an intermediate top. The current rise in short interest rates is not slowing the economy and Dow stocks are more vulnerable than Nasdaq to interest rates. Trillions of dollars flowing out of the U.S. to buy imports like oil and shoes, is flowing right back into the U.S. into stocks, but foreign investors do not like volatility. As long as the Treasury Dept. props up the value of the dollar, foreigners will own our stocks. If the dollar starts falling, a normal precursor to higher interest rates, they will be nervous, and dump U.S. stocks to reinvest in Japan, China and Europe. Analysts tell you now to buy technology. Too late! These analysts are recommending stocks after huge multi-year gains. Should you get in? No! Wait until the Federal Reserve lowers interest rates. You may have to wait a year, but you can get a guaranteed 6.25% in the two to five year Government notes. The Dow is down about 2.5% in 2000, and at the rate of first quarter decline, the market will be down 20% in 2000. NASDAQ just gave up 90% of this year's advance in 2 weeks. I like put option positions on the Dow, but with NASDAQ's bubble bursting, my new NASDAQ page will provide a list of falling stocks. The DJX April 108 put in at 1 3/16 is now showing a small loss. I like it, and the newly-added DJX April 105 put in at 11/16, which is also showing a loss, but not for long if the Dow should fall near 10,705, which is the major support level on Daily and Weekly charts. April puts will be exited there in anticipation of a Dow 300-point move up.
Copyright Notice, all pages Copyright©2000 and are made available as a service to the global Internet community. Pages may not be reproduced or sold in any medium without explicit, written permission from Steve Zito.