Steve Zito, MS Fin/BS Econ Wharton School, HTML Writers Guild
uses economic and technical analysis to forecast the direction of the stock market. The views in this newsletter are opinions only, and should not be relied upon as advice on investment decisions.
Nasdaq Feb.24 Nasdaq Feb.10 INDEX **DELL REPORT** EMAIL

NASDAQ COMPOSITE
INDEX closed 2117.63

Nasdaq may surge higher next 4 weeks
Sat., Mar. 3, 2001

******************Commentary*******************
Mar.3. Nasdaq has lost 6.4% since my last letter Feb.24. Importantly, Nasdaq has exhibited the sporadic churning action associated with an intermediate bottom, as many discouraged traders have moved to the sidelines on failure of the Federal Reserve to lower interest rates now. Technical indicators are deeply over-sold on every chart, and forecast 2 series of jagged short-term and saw-tooth intermediate-term rallies into the first week of April. Resulting from Friday's last-hour sell-off, Nasdaq short-term stochastics (10-day chart) fell to 24.53/54.50% (vs over-bought 97.10/44.43% Feb.24). Intermediate stochastics improved Thursday and are slightly negative at 12.05/13.67% (vs 23.78/13.34%). Longer-term (2-year Nasdaq chart) stochastics became very oversold at 5.67/30.33% (vs 14.11/31.59%) and forecast some more profitable Nasdaq recovery to the first week of April. I have rarely forecasted more than a few days out, but money can be made holding for a few weeks if Federal Reserve cuts rates on unemployment data March 9. INTEL stochastics positive at 27.27/16.09% (vs 17.97/20.55% Feb.24). Intel has tested $29 lows four times and should rise to my $39 target. MICROSOFT has corrected from $65 in Jan. Stochastics are still not over-sold enough at 38.46/41.03% (vs positive 33.33/16.66% Feb.24). Last month, 39.95 RSI (relative strength) faded from Jan. 54.14. Down 17.2% since Feb.24, CISCO led most of last week's decline in Nasdaq. Stochastics at 3.45/11.39% are at a low for the year (vs 28.16/12.47% Feb.24). I have recommended Cisco as good longer-term investment. ORACLE was added to my Model Portfolio at $21 9/16, stopped out at $19, just before the release of bad news last Thursday when owner L. Ellison apologized that CEO's of key Oracle customers postponed orders Wednesday after vice-presidents at those key customers had already approved those orders. L stands for "LAME", not "LARRY". Oracle stochastics plunging again at 11.61/19.93% (vs 23.71/17.04% Feb.24). Worldcom has lost 14.8% since Feb.10 as "Generation D" advertising campaign instills lack of confidence. Stochastics neutral at 32.38/24.17% (vs 21.05/15.57% Feb.24). DELL stochastics remain bullish at 50.75/35.45% (vs 56.82/25.86% Feb.24). RSI at 44.21 is still below 50 but over-sold. Dell is a great trading "buy" at $21. Nasdaq has cratered another 6.4% since Feb.24, Cisco 17.2%, Oracle 23.3%. Relative strength, Nasdaq went to new lows on capitulation in Cisco and Oracle. While many investors have been out of the market since last year, and day-traders recently look more like "road-kill" than the obnoxious phony characters depicted in all those online brokerage commercials, the current misery in the Nasdaq favorites is a chance to get in at bottom. By the time the next over-sold bounce is recognized as a tradeable rally, Nasdaq will be at 2300, and the move upward will be ALL finished. Stochastics for the 2-year chart are deeply over-sold and ready to go positive at 5.67/30.33% (vs 14.11/31.59% on Feb.24).
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