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.
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NASDAQ COMPOSITE
INDEX closed 1720.36

The Nasdaq needs your help!
Sun., Apr. 8, 2001

******************Commentary*******************
Apr.8. The failure of BUY-and-HOLD as a profitable strategy is great disappointment to many depressed investors who have been tutored by Peter Lynch, another mutual fund spokesperson teaching stocks ALWAYS go up in a long period of time. What investors have failed to realize is that statistics for this conclusion use data from 1880-1980, before the age of "online investing", before the rapid dissemination of information on the Internet, before the intentional mediocre HYPE of the press media, cable TV analysts. Nasdaq is near bottom, BUT NOT THERE YET, as evidenced by falling short-term stochastics Friday at 23.77/35.12% (vs 75.00/49.57%). However, 3 leaders on the way down, CISCO, ORACLE, and SUN MICROSYSTEMS, are making identical declines in unison. If just ONE rallies at Nasdaq 1600, they ALL will. Intermediate (90-day Nasdaq chart) stochastics are also now falling at 27.98/28.15% (vs 24.82/30.50%). Longer-term (on 2-year Nasdaq chart) stochastics surprisingly turning higher from an over-sold 8.04/15.01% (vs 4.19/21.02%). The next Nasdaq rebound will be short, especially if Cable TV's panel of industry trend experts never stop CONFUSING investors out of the market with scary "lack of visibility" comments, reports of slowdowns in Europe, Asia, and unjustified congratulation to 2 TV guest strategists Joe Battipaglia and Abby J. Cohen, whose advice to "BUY" one year ago at Nasdaq 4475 was irresponsible. An incredibly inconsistent CNBC guest analyst, Lehman Bros Dan Niles called for $87.50 Intel on May 30th, 2000. Now this analyst predicts INTEL headed down near $12. INTEL stochastics almost completely sold out at 16.38/36.91% (vs 33.73/45.52%). INTEL is likely headed for $39 target price, long-term fair value. MICROSOFT stochastics are very neutral at 68.33/63.56% (vs 56.03/55.04%). MICROSOFT nicely held forecasted $51 support last week. CISCO rates "BUY" with its deeply oversold stochastics at 7.29/8.52% (vs rising 11.71/15.27%). ORACLE is making a $14 base. Ranging ($13-16) Oracle stochastics at 22.75/40.81% (vs 34.07/47.32%). MACD, RSI bullish for two weeks. WORLDCOM stochastics 45.65/69.53% are falling (vs 74.55/74.57%). Overhead resistance at $19. Support at $16. MACD, RSI fading fast. DELL stochastics neutral at 52.34/49.22% (vs a falling 51.32/70.90%). RSI (50.12) neutral and MACD (0.13) now bearish. DELL is a SHORT sale at $28. Negative reports on falling PC PRICES will punish DELL. Sun Micro stochastics plunging at 11.69/15.59% (vs 22.99/30.07%). Nasdaq has fallen over 0.79% per day for 30 trading days, or 23.96% since Feb.24. In that time, CISCO, down 49%, makes it recovery tops. Consider diversification. Markets outside the U.S. have greater long-term potential.Japan ADRs outperformed in the past 3 weeks:
NEC(NIPNY)up 16% Canon(CAJ)up 8% Nissan(NSANY)up 1%
One year anniversary. Thanks for reading. CANADIAN STOCKS!
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