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 feedback form.
Coming! The NASDAQ page.---INDEX--- Stocks to BUY NOW!

INDUSTRIALS INDICATORS
THE STANDINGS

Four of seven indicators are negative
Wed. April 5, 2000

The Dow Jones Average
CHART INDICATORS

5-minute chart
Negative trend
resistance 11,100

15-minute chart
Negative trend
resistance 11,102

30-minute chart
Negative trend
resistance 11,110

60-minute chart
Negative trend
resistance 11,121

Daily chart
Neutral
major support 10,770

Weekly chart
Neutral
major support 10,745

Monthly chart
Positive
long-term support 10,195

Today's Update

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.

******************Commentary*******************
LOSING MONEY? The Dow has 4 indicators giving a sell signal after a close below Dow 11,100. Was yesterday the resumption of a move upward? NO. I said ignore the technicals for a day on Monday and look at fundamentals. Now it's time to get back to technicals. The 5-, 15-, 30-, and 60-minute charts had support levels at Dow 11,100 to 11,121. Closing below that gave a sell signal, and may lead to another PLUNGE IN THE DOW. Can both the Dow and Nasdaq move together? Sure, since the factors driving the stock market are not peculiar to either the Dow or Nasdaq. The media has created big hype about the old economy vs the new economy. They are the same ones who told us we would have a Y2K meltdown. Where did all of the money from the NASDAQ selloff go this week? Into the Dow. This propelled the Dow up 500 points in two hours Tuesday in the face of economic reports indicating the economy is robust. What is going on here? Rotation. The money coming out of NASDAQ is so huge, it cannot be absorbed by bond and money markets. So it is being parked in bank, drug, retail, and food stocks in the Dow, defensive issues held in uncertain times. Will Dow's strength last? The 5-, 15-, 30-, and 60-minute charts reveal the Dow has been trading horizontally since March 23. After the last 9 trading days, the Dow is less than 100 points from where it closed March 23. This is what traders, strategists call DISTRIBUTION. Brokerages eager to prop up markets with talk to keep the public invested are getting their largest and best clients out. The impending meltdown in the market may happen next week or next month. April DJX put options picked on Mar.23 were exited yesterday as the Dow hit support at 10,725. After the Dow rebounded 500 points late yesterday, DJX 104 puts for May were entered at Dow 11,225. The Dow is set up for a 1,000 point free fall, when the brokers and traders finish their stock DISTRIBUTION. The corrective selling will go on until the Federal Reserve LOWERS interest rates. In a speech today, the Federal Reserve chairman showed no sign that rate rises will end. Look at your portfolio statement for March. What is the bottom line telling you? If you are not making money this year in the stock market, why take the risk of losing more money?