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Steve Zito is a stock market technical analyst who also uses economic and technical analysis to forecast 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 question, use our survey form.
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INDUSTRIALS INDICATORS
THE WEEKLY STANDINGS
Four of seven indicators are negative
March 23, 2000
*************Commentary*************
The media would have you believe that stock prices will continue onward and upward without an end in sight. That is why they are touting stocks on TV, instead of paying attention to market history and its lessons. The media reporters have no memory, praising small investors for buying every dip. The market will fall, and it is only a question of how soon!
Four out of seven indicators are negative. This is fast approaching the extremely bullish euphoria last seen in the market when I called the top at Dow 11,722 for January. (All right, so I predicted the top at Dow 11,711, but that prediction was made back in October 1999.)
Today may have seen the top as the Dow appears to have just completed a typical "head-and-shoulders" formation. Today's Dow 253-point advance was mainly in the gains in three key companies reporting one-time news events: GM selling GM Hughes to News Corp (a rumor), Microsoft settling anti-trust with the government (how many times have you heard that one?), and Intel going to the ridiculously overvalued level of 145 predicted by widely followed analysts several weeks ago (the same ones who recommended selling Intel last fall at 70 near its 52-week low, but who remembers last year?). Another 50 points up and it's time for DOW puts in the MODEL PORTFOLIO.
The Dow is often subject to a seasonal decline in the first two weeks of April due to the filing of tax returns and related funds outflows. If I had to guess, I think the best value in a decline would have to be the DOW DJX April 108 put. It should give one of the best returns over the next month.
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The Dow Jones Industrials Average
TECHNICAL INDICATORS
Five minute chart
Moderately negative
support 11,006
15-minute chart
Very negative
support 10,968
30-minute chart
Very negative
support 10,900
60-minute chart
Moderately negative
support 10,883
Daily chart
Neutral
support 10,602
Weekly chart
Neutral
support 10,680
Monthly chart
Still positive
support 10,050
Trend change probability---high.
Support levels if broken would indicate a change in trend.
Model Portfolio
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