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 solely relied upon for investment decisions.
Nasdaq April 15 -Trading Tips -Archives -Top Stocks -EMAIL ME

NASDAQ COMPOSITE
INDEX closed 1810.67

Nasdaq trending weaker-April 18, 2002

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April 18 Go To Page 2. Nasdaq Composite closed at 1810.67 -6.12 on Wed., April 17. Dow Jones closed 10,220.78 -80.54. Nasdaq opened 40 points higher on Tuesday. Did nothing since, except cause debate on whether it's a new bull market. Pundits on TV financial news pushing the story markets want to go higher, economy is improving, scandals still lurk as investor uncertainty until TAX DAY causing a hesitation. I wrote correctly March 28 to expect weakness April 5-15 prior to the U.S. Income Tax deadline. Merrill Lynch and NY attorney general try to settle leaked stories internal emails by Merrill staff labeled favored Internet stocks as "worthless garbage" while Merrill publicly pushed. Ever wonder why that dot.com your broker sold you went bankrupt? Merrill doesn't. Nor does Henry Blodgett, Merrill's Internet analyst. Nasdaq gap between Monday's close 1756 and Tuesday's open 1798 likely will be filled by quick decline. The markets are somewhat over-bought intermediate term and a new bull market is not imminent. The best timers can expect is a two-week rally. The Dow's 90-day moving average stopped falling Tuesday at 10,230. The Dow moving average had declined from February's peak 10,560. The present rate of decline equivalent to 35% annual fall, compared to Dow's 44% rate of decline last week, which was unsustainable. A trend change was imminent on Monday, but there was no follow through. Taxpayers saw what cash was left after their taxes. Certainty is a bullish factor, war news is not. The war in the Middle East may grab the headlines, but markets are ignoring it. Short-term market trend neutral. Next major support level still at 9858, if war explodes. The Dow is a buy when it falls under 9900. RSI is still negative, as it was since March 1. MACD is bearish. Dow's stochastics 45%/44% still not low enough to forecast 11,000. Expect a fall for several days, followed by a late April surge. Nasdaq capital is being sucked away into small-cap funds. On 10-day chart, Nasdaq is 0.0% below moving average resistance 1811. RSI, MACD positive, at highest levels in past ten days. Wednesday, stochastics went from very overbought to 24%/20%. In short-term, Nasdaq is directionless. On an intermediate 90-day chart, Nasdaq 1.4% above 90-day moving average support at 1785. Those expecting immediate gains in Nasdaq are spreading word Tuesday's large gains are new bull breakout, yet Nasdaq suffering from loss of investor enthusiasm ever since Mar.12. Intermediate RSI, MACD turned neutral after a month. Nasdaq 90-day stochastics fell from 100% to stay over-bought 79%/76%. Long-term Nasdaq moving average resistance 1820. Nasdaq wanted to test 1620, but sideline players could not wait Tuesday. The 40-pt. opening gap was herd instinct, postponing 1620 for a reverse head and shoulders. If 1820 is not significantly penetrated this week, momentum will fade. RSI, MACD negative, oversold stochastics rose to neutral 50%/20%.
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