Stock Market Direction by Steve Zito Financial Newsletter April 25, 2003 Page

PUBLISHED DAILY - STOCK MARKET DIRECTION - © April 2003
STOCK MARKET DIRECTION by Steve Zito Financial Newsletter
Technical Indicator Analysis of the Nasdaq Composite Index
Individual analysis of the eight largest technology stocks.
Redistribution only with permission of the writer Steve Zito.
SUBSCRIBE Updates published DAILY Worldwide Readership Index

SUMMARY OF THE FOLLOWING NEWSLETTERS (below) from April 21 to April 25, 2003:
Dow Jones will move over 8550 the day the April employment data is released.
Nasdaq has already broken out, when it closed above 1425, my target is 1525.
Recommended stocks (Apr.23) are Priceline.com, Level 3, Sun Micro, IBM, NVDA.

STOCK MARKET DIRECTION by Steve Zito Email Newsletter for Monday, April 21, 2003
To contact or ask questions, http://www.oocities.org/steve_zito/surveyform.html

Closing prices from Monday, April 21, 2003
Dow Jones Industrial Average
----------------------------------------- 8,328.90 - 8.75 (-0.10%)
Nasdaq Composite Index
----------------------------------------- 1,424.37 - 1.13 (-0.08%)
S&P 500 Index
------------------------------------------- 892.01 - 1.57 (-0.18%)
10-Year Note yield
-------------------------------------------- 3.979% +0.022

Dow Jones Industrials closed 8,328.90 -8.75 at 0.3% above a positive short term trend.
That trend line has been advancing an average of only 0.148% per trading day in April.
Has anyone told traders that the war on Iraq is over? How many TV pundits or financial
announcers told you in January and February that the stock market would roar ahead as
soon as Baghdad was freed and Saddam was toppled? All of them. Yet it has not happened.
For one, TV announcers never studied Finance, most can barely read the STARBUCKS menu.
Secondly, stocks reflect future cash flow expectations, not Middle East regime changes.

The Dow Jones will seriously rise above the 8550 level when traders and investors are
convinced that the U.S. economy is rebounding by more than 3% growth in GDP. On Friday,
the latest GDP report will be released, and noted economist Mickey Levy expects a big
upward revision. If Levy is correct, interest rates will rise, off bottom in rates for
consumer lending, for new mortgages, for leases and auto financing, for deposit rates.
If a large group of investors believe it true, they will take billions from bond funds
and move into equity funds. Trim Tabs reported $6.6 billion moved into equity funds in
the past week, similar to the outflows in early July 2002 when the Dow Jones made a low
7500. That money is going into tech and especially semiconductor firms like Intel, AMD.

The cash flows from profit must appear within six months to justify their stock moves.
Before then, momentum players can push these stocks since momentum is self-fulfilling.
AMD for example, made a low at 3.30 last summer, and tested at 5.00 last October, then
raced ahead to 9.40 on Dec. 2 as Lehman Brothers Dan Niles upgraded it. After that, AMD
went right back to 5.00 because the cash flows never showed up to justify its momentum.

AMD is again on the move despite sales running below breakeven $700 million a quarter.
That resulted in $0.42 per share loss reported last Thursday. Why did the stock respond
by racing from 7.00 to close today at 8.39? Tuesday's release of the SledgeHammer chip
is expected to increase cash flows next year for AMD. If AMD can clear an $800 million
per quarter sales level, AMD is leveraged and further incremental revenues likely bring
tremendous profitability. Intel on the other hand is not leveraged, but does have more
consistency in revenues and profits. Intel will be a market performer, low risk/reward.

Intel has an advantage as index funds will have to buy twice as many Intel shares as
Hewlett-Compaq or IBM since Intel is both in the Dow Jones and in the Nasdaq Composite.
Dow stochastics fell to neutral 48%/46%. Traders ignored a 0.2% drop in LEI on Monday.
Mickey Levy said, 8 of the 12 components used to calculate the Leading Economic series
were already known (such as stock prices). Stocks need a catalyst, and Levy sees that
coming Friday with an unexpected strong GDP report showing 3% growth in U.S. economy.

Dow favorites
JNJ closed 55.36 +0.35 (+0.64%)
PG -closed 89.43 +0.17 (+0.19%)
MCD closed 16.01 +0.01 (+0.06%)
KO -closed 40.11 -0.29 (-0.72%)
HD -closed 27.47 +0.10 (+0.37%)
BA -closed 26.78 +0.13 (+0.49%)
GE -closed 28.16 -0.33 (-1.16%)
AXP closed 36.47 -0.61 (-1.65%)

Nasdaq Composite Index closed 1,424.37 -1.13 at 1.7% above trend. Stochastics 90%/84%.
Nasdaq closed at the same high hit March 21 (options expiration) and again on April 7.
In fact, Nasdaq sold off this morning on weaker LEI, then rallied to 1425 four times.
Nasdaq never exceeded 1425 each time it rallied on Monday. Traders use the same charts
I analyze, information is spread so fast everyone has it. Unlike traders, I forecasted
the 1425 level as a barrier last week, not noon Monday. What is next? Nasdaq breakout
may just happen. Retail investor favorites like Priceline (PCLN) are starting to move.
Priceline joins Internet doublers like Yahoo and AOL, which are rising in weak markets.

Yahoo was at 10 last year, now it is 25. America Online is up from 10 to 13. Valuations
do not matter in the Internet stock space. Day traders love them because they have wide
price swings (high betas, greater price moves). Investors love their longterm potential
to become another Microsoft. I like Priceline because of the pentup demand for tickets.
Monday morning, Priceline was 2.15 up 0.25, above 2.00 for first time in a long time.
From March 2001 to June 2001, Priceline went from 2.00 to 10.00, and I was in it heavy.
Best way to judge PCLN is to visit their website and try their product. Place a low bid
like $29 a night for 4-star hotels on major holidays. I did that with PCLN, it completed.

Following are the indices, the best one for options is Gold and Silver, XAU. Go heavy.
The U.S. dollar is starting to tumble, as oil anticipates OPEC will reduce production.
Investors in oil trading are reacting to TV videos showing returning Iraqi oil workers
dressed in orange jumpsuits distributed by the U.S. military to mark them as friendly.
Iraqis apparently don't know orange jumpsuits represent low status symbols in the U.S.

CNBC portrayed 10,000 Shiite Muslims marching in downtown Baghdad with Arabic banners,
stating "Yankee go home" in Arabic. Joe Kernen at CNBC remarked on these videos Monday
that it was great to see freedom in action, free Iraqis can protest like never before.
Joe doesn't realize the banners the Shiites carry demand the likes of Joe to get lost.
Unlike in the U.S., the Marines just stood there and watched the anti-American protest.
In the U.S. (Oakland, New York City) authorities had shot 75 kids with rubber bullets.
Buy gold stocks, betting on a falling U.S. dollar as Europe gets faster growth in 2003.

DJX closed. 83.29 -0.09 (-0.11%)
XOI closed 436.71 +0.10 (+0.02%)
OSX closed. 86.30 +0.85 (+0.99%)
XAU closed. 68.85 +1.84 (+2.75%)
BKX closed 769.90 -2.82 (-0.36%)
BTK closed 335.98 +0.99 (+0.30%)
SOX closed 334.41 +1.45 (+0.44%)

The usual favorites on Monday
INTC closed 18.65 -0.01 (-0.05%)
AMD -closed. 8.32 +0.29 (+3.61%)
MSFT closed 25.21 -0.29 (-1.14%)
CSCO closed 13.94 -0.01 (-0.07%)
ORCL closed 11.84 -0.16 (-1.33%)
DELL closed 29.48 -0.02 (-0.07%)
SUNW closed. 3.28 +0.04 (+1.23%)
ACN -closed 15.00 +0.25 (+1.69%)
BE --closed. 6.76 +0.03 (+0.45%)
IBM -closed 83.36 -0.90 (-1.07%)

Low priced turnaround candidates
NT -closed 2.57 +0.16 (+6.64%)
LU -closed 1.58 +0.08 (+5.33%)
ELN closed 2.92 -0.05 (-1.68%)

YHOO closed 25.41 +0.32 (+1.28%)
AOL -closed 12.90 +0.30 (+2.38%)

STOCK MARKET DIRECTION by Steve Zito Email Newsletter Wednesday, April 23, 2003
To contact or ask questions, http://www.oocities.org/steve_zito/surveyform.html

Closing prices from Wednesday, April 23, 2003
Dow Jones Industrial Average
----------------------------------------- 8,515.66 +30.67 (+0.36%)
Nasdaq Composite Index
----------------------------------------- 1,466.16 +14.80 (+1.02%)
S&P 500 Index
------------------------------------------- 919.02 + 7.65 (+0.84%)
10-Year Note yield
-------------------------------------------- 3.995% +0.012

No sooner had all the museums in Baghdad been looted by whom the U.S. military have
labeled "insiders" and "professionals" than 20 ancient Iraqi paintings and thousands
of looted Iraqi bonds turned up at Boston Logan Airport in the luggage of one FOX TV
newsman who was returning from Iraq. The right wing patriotic FOX network fired him.
U.S. Customs arrested him. The Homeland Security Dept is now measuring the former FOX
technician turned looter - smuggler for his brand new orange jumpsuit. He will likely
join 660 prisoners in Cuba (including 3 teenage detainees) who will never see freedom.

Freedom is what the returning Iraqi oil workers in the southern Iraq oil fields have.
They also have some brand new orange jumpsuits seen in CNN video of their return, none
of them have any idea what wearing an orange jumpsuit around U.S. soldiers represents.
What do Iraqi oil workers care? They get free room and board, and three square meals.
That is more than the 34 million Americans shackled in poverty ever expect to receive.
Or the 41 million (according to U.S. Census) who have no health insurance for illness.

Monday, 10,000 Shiite Muslims marched into downtown Baghdad with Arabic banners saying,
Yankee get lost. Tuesday, the same crowd swelled to 75,000 and Bush's man Ari Fleischer
intimated it was an influx of meddlers from Iran. Wednesday the crowd exploded to over
a million chanting U.S. get out. The 12 million Shiite majority in Iraq wants theocracy,
a Muslim state nation. Now George W. is having his worst nightmare come to pass. IRAN 2,
THE SEQUEL. Bush called for democracy and freedom in Iraq, as long as Shiites stay home
excluded, and minority Kurds and secular Sunni Muslims control oil for U.S. interests.

The U.S. military found $680 million in $100 bills in boxes buried in cement walls, and
then another $600 million in a dog kennel. What did the Army do? World press caught them
in photos loading millions of loot in U.S. currency on cargo planes departing from Iraq.
Rumsfeld had the nerve to criticize a poor peasant looting a flower vase from a palace.
While U.S. soldiers try to fly out $1.3 billion in $100's. Like a George Clooney movie.

As if the Republican image was not tarnished enough, Pa. Senator Rick Santorum was duly
criticized for proclaiming homosexual sex is the same as incest, polygamy, and recounts.
Democrats naturally asked for Sanctomonium to step down as the Senate Republican leader.
I am hazy on my old Catholic school, but didn't Jesus say to turn the other cheek, but?

Speaking of sex, the 250,000 U.S. soldiers are coming home, and 9 months later, their
19-year old wives will be having a baby boom which is why the stocks of Proctor-Gamble
and Kimberly Clark are gaining this week. Those two make Pampers and Huggies diapers.
The skirmish in Iraq is over, and likely will create 250,000 new babies to start 2004.
The war on the "coalition of the unwilling" began with a health ban on Toronto by WHO,
announced Wednesday, likening Canada's most vibrant and economically healthy city to a
backward unhealthy Beijing. If Toronto is so sick, how did the hockey Leafs extend the
Flyers to 2 overtimes in Toronto Monday? Okay, so that Toronto goalie had a face mask.

Officials say Friday is deadline for Indonesians, Bangladeshi, Egyptians report to FBI.
The purpose is questioning, but significant portions of those dumb enough to show are
never seen again in polite society. The U.S. leads the world for inmates now in prison,
and the U.S. was only behind Communist China and Iraq in number of men executed in 2002.
Obviously, freedom has nothing to do with quality of life. Ask the MBA graduate Frankie
Quattrone of CS First Boston, who was arrested by the FBI today for his part in Internet
stock market IPO's three years ago. Frank makes Gordon Gekko look like a Mother Theresa.
Next on the government list is dot.com analyst Holly Becker, long a favorite CNBC guest.
Apparently, Becker and her in-law relatives sold out days before bad news or downgrades.

Dow Jones Industrials closed 8,515.66 +30.67 at 1.5% above a positive short term trend.
Stochastics rose slightly to overbought at 96%/80%. The Dow is challenging the peaks it
made in March when the Iraq folly finished, and again the same 8520 level from April 7.
Why are Dow's stocks lagging Nasdaq, which has already broken out? The Dow is populated
with multinational firms, which are going to suffer from SARS in Asia, or anti-American
sentiment in the Middle East. How many F-18's will Boeing sell to the new Iraq mullahs?
How many power plants will General Electric build in Syria and Iran? How many Walmarts
will open up in France, Germany, Belgium, and Italy, whose citizens opposed war by 80%?
Still, the male dominated Walmart does have a chance in backward Iraq and Afghanistan.

The Dow Jones peaked near 8500 (at 8450 as traders took no chances) last week (Tuesday)
in what appeared to be a breakout fizzling into another failed penetration of Dow 8550.
The emphasis, focus, and money then shifted to Nasdaq as Intel and Microsoft led gains.
Since Intel's earnings and Pentium 5 release, the tech heavy Nasdaq has led all markets.
Is the Nasdaq message the reality, or is a hesitation in the Dow Jones somber caution?

When a bull market starts, it is interest rate driven, and boosts all types of stocks.
The lagging Dow is worrisome, since it indicates the rally in stocks is narrowly based.
When great companies like BA do not have their stocks participating, it is not a bull.
Notice the performance of Boeing relative to the many of Nasdaq's stocks. I wrote that
Boeing was a good short sale recently. Boeing lost only $478 billion in latest quarter.
Bush gave a speech at the St. Louis Boeing plant which makes F-18 Hornets, apparently
unaware his jobs speech was given to Boeing's workforce after recent layoffs of 2500.

XAU closed 68.92 +0.16 (+0.22%) at 1.4% above an uptrend. Stochastics high at 79%/81%.
The U.S. dollar is weakening as Greenspan floods a world with more dollars, the result
will be too many dollars chasing too few IPO's causing a bubbling U.S. asset inflation.

SOX closed 347.32 +2.11 (+0.61%) at 4.6% above new uptrend. Stochastics high 95%/96%.
Chip stocks remain overvalued and overbought. The recent 11-week rally in chip stocks
appears to be a classic 5-wave Elliott Wave pattern very close to finishing at a peak.
The Internet bubble in eBay, Yahoo, AOL, and Amazon is worrisome, as is complacency.
Asia supplies the building blocks for computers, and SARS is wrecking Taiwan, China.
Fortunately, Europe can make up for lost Asian chip production, but at a higher cost.
While Intel slows in Malaysia, AMD has a plant in Dresden, and Texas Inst. in Italy.

Nasdaq Composite Index closed 1,466.16 +14.80 at 2.7% above trend. Stochastics 95%/90%.
Tech-heavy Nasdaq has broken out, but it is led by Internet darlings eBay, Yahoo, and
Amazon.com, all of which have excessively high Price-to-Earnings on standard measures.
Still, momentum cannot be denied and was evident at the previous Nasdaq resistance 1425
pierced only on Tuesday. Next major hurdle is the 1525 level, and then clear sailing to
Nasdaq 1680, the level Nasdaq hit just before Sept. 11, 2001. Stocks rise in advance of
earnings improvement. Many tech stocks on Nasdaq are less subject to global disruptions,
not many Priceline customers buy air tickets to travel anywhere outside North America.

While there are true earnings at eBay which auctions hot selling Iraqi banknotes with
Saddam's picture and other memorabilia of that Axis of Evil, Yahoo and Amazon operate
at breakeven levels, and AOL trades 100% higher than its fair value. Momentum is back.
There is plenty of sideline money to chase stocks, as Trim Tabs reported $6.6 billion
entered equity funds last week. Greenspan returns for a fifth term, and he has flooded
the U.S. money supply (causing the dollar to fall in foreign exchange). That money has
no place to go but stocks. It likely is not to be used to create anything but a bubble.
What will Greenspan call Nasdaq if it hits 2000 by July? Maybe, exuberantly irrational?
Click your heels together Dorothy, repeat over and over, "It's only a momentum rally."
For my Canadian readers, that Dorothy line is from the culture classic, Wizard of Oz.

INTC closed 19.48 +0.48 (+2.53%) at 5.2% above steep uptrend. Stochastics at 93%/92%.
Why 3% growth in U.S. PC sales would spark a chip stock rally is vague. Intel did beat
First Call earnings consensus by $0.02 a share, yet trading at high end of a P/E range.
Intel motherboards are made in Taiwan, and supply disruptions are coming due to SARS.
Not to mention that the mother of all cyclones hit the island of Taiwan on Wednesday.

AMD closed 8.38 -0.06 (-0.71%) at 4.9% above its nice uptrend. Stochastics at 80%/90%.
Subscribers are holding AMD July 10 calls. Rising expectations of telecom chip sales.
Taiwan's Acer is taking share from Gateway, sales up 44%, heavy use of AMD processors.

MSFT closed 25.72 -0.02 (-0.08%) at 1.5% above sideways trend. Stochastics at 79%/80%.
Is it really better with the Butterfly? Who dreamt up that MSFT advertising campaign?
No wonder Sen. Rick Santorum is crying out with his homophobic messages for the kids.

DELL closed 29.89 +0.00 (+0.00%) at 1.7% above a rising trend. Stochastics at 82%/80%.
Subscribers who sold short Dell at 29 were advised Tuesday to cover at 29.98 on rally.
If short, place a buy stop order at 30, in case Dell breaks out on Dataquest PC news.
Dell has been eating Hewlett-Compaq's lunch in Europe, Toshiba retains quality awards.

ELN closed 3.21 +0.24 (+8.08%) at 7.0% over breakout trend. Stochastics up at 80%/55%.
Subscribers bought Elan at 2.85, and have raised the ELN stop loss orders to 2.50 now.

PCLN closed 2.10 -0.01 (-0.47%) at 6.6% above terrific uptrend. Stochastics at 70%/78%.
Priceline sells air tickets for domestic U.S. summer vacations and some pentup demand
will make comparisons with last year better. Visit Priceline.com and study its model.
You bid a price, and Priceline finds a seller to match your airticket, hotel price bid.
In 2001, Priceline stock rallied from 1.06 in Jan. to 2.00 in March, then to 10 in June.

The following Internet stocks are strong buys, but overextended. Buy on 10% pullbacks.
LVLT closed. 6.26 +0.38 (+6.46%) at 4.7% over steep uptrend. Stochastics at 97%/50%.
EBAY closed 94.32 +5.10 (+5.72%) at 4.2% over solid uptrend. Stochastics at 95%/75%.
YHOO closed 25.60 -0.06 (-0.23%) at 2.0% over great uptrend. Stochastics at 68%/80%.
AOL -closed 14.00 +0.69 (+5.18%) at 7.7% over sweet uptrend. Stochastics at 95%/94%.

STOCK MARKET DIRECTION by Steve Zito Email Newsletter for Thursday, April 24, 2003
To contact or ask questions, http://www.oocities.org/steve_zito/surveyform.html

Closing prices from Thursday, April 24, 2003
Dow Jones Industrial Average
----------------------------------------- 8,440.04 -75.62 (-0.89%)
Nasdaq Composite Index
----------------------------------------- 1,457.23 - 8.93 (-0.61%)
S&P 500 Index
------------------------------------------- 911.43 - 7.59 (-0.83%)
10-Year Note yield
-------------------------------------------- 3.905% -0.090

Mrs. Ashcroft says going to bed "Honey, please hold me." John replies, "On what charge?"
Bush's pointman on a domestic Arab roundup says illegal aliens can be held indefinitely.
Five skinheads in California took that to mean hold Arabs while beating them senseless.
http://story.news.yahoo.com/news?tmpl=story2&cid=564&e=41&u=/nm/20030423/ts_nm/iraq_usa_hatecrime_dc_1
Rashid Alam, 19, had to get surgery to reconstruct his smashed nose, cheeks and jawbone.
Californian skinheads used baseball bats and golf clubs on Alam, whom they did not know.
If the skinheads had hockey sticks and fancy uniforms, they could all skate for the NHL.
Friday is deadline for Indonesians, Bangladeshis, Egyptians in U.S. to report in to FBI.
Supposedly for questioning, perhaps all the Muslim-Americans should pack overnight bags.

Dow Jones Industrials closed 8,440.04 -75.62 at 0.5% above a positive short term trend.
Stochastics fell slightly from overbought to 68%/89%. The Dow Jones failed to go where
Nasdaq has been all week, Naz is making 3-month highs. The TV media blamed it on a jump
in weekly jobless claims to 455,000 filing first time. So a few people are out of work?
President Bush gave a speech in Ohio at a Timken ball bearing plant (they make bearings
for Air Force One which carries plenty of balls). Bush derided Congressional opposition
to tax cuts, "they won't even support a little itsy bitsy plan, let alone what we need."
Why does Mr. Bush believe "he" needs a tax cut? He had his first $10 million by age 15.

Multinational stocks in the Dow are affected by SARS but Canada fired back at a WHO ban
on travel to Toronto with the Mayor of Canada's greatest city blasting U.S. travel bans.
Planes from the U.S. to Toronto are shown as having 7 passengers instead of a normal 80,
four major conventions have been cancelled in coming months (economic loss $30 million),
and the Atlanta-based CDC is now denying it gave the WHO a go ahead to declare the ban.
The CDC now says it only warned travelers to Toronto to be careful and avoid Canadians.
CNN video of Chinatown in Toronto showed empty restaurants, streets, and cash registers.
I wrote yesterday, this is how the powers that be can punish the coalition of unwilling.

Other Dow Jones stocks weak are the oils Exxon-Mobil and Chevron, traders still cannot
believe that OPEC came out of emergency meetings today and RAISED oil production quotas
when the entire investing community expected OPEC to cut production to boost oil prices.
Asked for explanations, Saudi delegates mumbled something about "We're next" and a few
very, very new Iraqi OPEC delegates asked for directions on how to find Iraq on the map.
After all, how many Washington DC lobbyists ever had to travel outside the Capitol mall?

Minnesota, Mining, and Manufacturing, leading maker of surgical masks, has fallen for a
few days after making impressive 52-week highs lately. Word has it SARS can be spread by
shaking hands, so what good is wearing a surgical mask to job interviews? That hurt 3M.
M,M, and M is the number one maker of surgical masks, with demand exceeding sales 10-1.
If you don't care about SARS, or believe the U.S. is immune, go visit local Chinatowns.
You won't have to wait for seating in the best restaurants in San Fran, NYC, or D.C.

Nasdaq Composite Index closed 1,457.23 -8.93 at 1.6% above trend. Stochastics 80%/90%.
Tech-heavy Nasdaq has broken out, but it is led by Internet darlings eBay, Yahoo, and
Amazon, which reported a pro-forma $0.10 net income tonight vs. expectations of $0.04.
Amazon loses money, and always has. Pro-forma earnings take out non-recurring expenses
on the premise operating earnings will not be affected by one-time charges in future.
The TV media reports these pro-forma earnings without disclaimer, and traders trade on
pro-forma with little regard to reality. After reporting a pro-forma gain, AMZN jumped
$2.62 in after-hours. Both Yahoo and eBay rose in sympathy. Amazon should open higher.

Yahoo barely makes a profit, relying on charging customers for its email and webhosting,
services which were originally free when Yahoo supported itself solely with advertising.
Yahoo is a directory like a telephone book, listing everything of value on the Internet.
Type in my name in Yahoo's SEARCH box, and you will get Stock Market Direction results.
Type in your name into Yahoo's SEARCH, and you might see, "highly informed SMD reader."
Kidding aside, Yahoo is not a search engine like AOL Search, MSN Search, Lycos, Excite.
Yahoo uses different algorithms developed by a Taiwanese student at Stanford, J. Yang.

XAU closed 66.16 -2.76 (-4.00%) at 1.7% below uptrend. Stochastics cratered to 0%/51%.
Blame OPEC, which raised oil production instead of lowering quotas to boost oil prices.
Why OPEC wants to force oil prices down below $25 is anyone's guess, ask the Pentagon.
The brass are the ones who approve sales of advanced jet planes to Saudi Arabia, which
has to be scared witless at the prospect of Iraqi Shiite-led Muslim theocracy next door
to them. The Saudis control OPEC, and may have brokered a deal with best friend George.
If they send oil down to $20, the U.S. will install pro-Saudi regimes in the neighbors.

I am not talking about the millions of Saudis who have no control. I mean 12,000 Princes
who own and manipulate an entire population of Saudi Arabia, including vast oil reserves.
Saudis are paid in U.S. dollars for their oil, if they get a higher rate on U.S. dollars
to offset lower oil prices, they lose nothing, but keep their friends in Texas USA happy.
By keeping oil prices lower, that can boost the U.S. economy and the value of the dollar.

Gold will still advance regardless, since the Pentagon has moved North Korea to the top
of the Axis of Evil list just ahead of Syria, Iran, Yemen, Angola, Toronto and East L.A.
No one is feeling sorry for L.A. judging by ratings to watch Minnesota trash the Lakers.
Let's hope the Minnesota Timberwolves can show Americans, hard work beats braggadocio.
Los Angeles Lakers guard Kobe Bryant does not even talk to his dad, said the L.A. Times.

Study the GDP report Friday morning for more clues to the near term direction in gold.

SOX closed 342.01 -5.31 (-1.53%) at 2.4% above new uptrend. Stochastics high 77%/90%.
Chip stocks remain overvalued and overbought. The 50-trading day rally in chip stocks
appears to be a classic 5-wave Elliott Wave pattern very close to nearing its peak 345.
An Internet bubble in eBay, Yahoo, Amazon and AOL is worrisome, as is the complacency.
Complacency is measured by the VIX, Volatility Index, measuring deviations from trend.
When CNBC calls the VIX the "fear index" they do not know of what they are describing.
Volatility exists up or down, 50-point gain in SOX has higher VIX than a 30-point fall.
Fear is associated with falling prices, yet volatility on the upside has been greater.

ELN closed 3.46 +0.25 (+7.78%) at 10.5% over breakout trend. Stochastics up at 98%/80%.
Subscribers bought Elan at 2.85, and should raise the ELN stop loss order to 3.00 now.

AMZN closed at 25.12 -0.31 (-1.21%) at 0.6% below sideways trend. Stochastics 32%/55%.
Amazon.com is up 32% from 19 to start this year, on a smoke and mirror earnings mirage
that even the greatest skeptic admires. Amazon sells books online at the lowest prices.
Sales ballooned recently when Amazon offered free shipping. Expectations were for $0.04
per share pro forma gain and when AMZN reported $0.10 tonight, the stock jumped $2.62.
When Amazon opens on Friday, it will be sharply higher, dragging Nasdaq up in sympathy.

PCLN closed 2.04 -0.06 (-2.86%) at 2.0% above an easing uptrend. Stochastics at 49%/58%.
Priceline sells air tickets for domestic U.S. summer vacations and some pentup demand
will make comparisons with last year better. Visit Priceline.com and study its model.
You bid a price, and Priceline finds a seller to match your airticket, hotel price bid.
I have bought first class hotels for popular vacations for $29 a night (weekends too).
In 2001, Priceline stock rallied from 1.06 in Jan. to 2.00 in March, then to 10 in June.
As always, if you buy these low priced stocks, enter a Stop Loss at 10% below purchase.

The following Internet stocks are strong buys, but overextended. Buy on 10% pullbacks
from April 23, LVLT 6.26, EBAY 94.32, YHOO 25.60, and AOL 14 (price when recommended).
LVLT closed. 5.84 -0.42 (-6.71%) at 1.7% below weak uptrend. Stochastics at 18%/37%.
EBAY closed 94.64 +0.32 (+0.34%) at 3.3% over solid uptrend. Stochastics at 99%/79%.
YHOO closed 25.45 -0.15 (-0.58%) at 1.0% over great uptrend. Stochastics at 50%/72%.
AOL -closed 13.80 -0.20 (-1.43%) at 4.4% over sweet uptrend. Stochastics at 77%/89%.

As mentioned before, Amazon reported good earnings and will open Friday sharply higher.
Both Yahoo and eBay were moving up in after hours Thursday in sympathy with Amazon.com.

STOCK MARKET DIRECTION by Steve Zito Email Newsletter for Friday, April 25, 2003
To contact or ask questions, http://www.oocities.org/steve_zito/surveyform.html

Closing prices from Friday, April 25, 2003
Dow Jones Industrial Average
----------------------------------------- 8,306.35 -133.69 (-1.58%)
Nasdaq Composite Index
----------------------------------------- 1,434.54 - 22.69 (-1.56%)
S&P 500 Index
------------------------------------------- 898.81 - 12.62 (-1.38%)
10-Year Note yield
-------------------------------------------- 3.886% - 0.019

Dow Jones Industrials closed 8,306.35 -133.69 at 0.9% below a trend that just went bad.
Stochastics plummeted to oversold at 18%/55%. The Dow Jones has now failed miserably
to break out above 8550, this time blaming the weaker than expected Friday GDP release.
The economic health (or lack of it) was hurt by what TV media described as WAR fears,
consumers staying at home to watch CNN war coverage, lack of new business investment,
higher inflation on oil price hikes, surging imports from China, and just bad weather.
Unlike the GOP (Republican Party), popular economists no longer blame Sept. 11, 2001.

Not one major TV financial program attributed U.S. slowdown to the public lack of trust
in Wall Street officials, like NYSE Dick Grasso, Citigroup CEO Sandy Weill, MSO's CEO
Martha Stewart, Imclone's CEO Sam Waxsal, and a horde of supporting fraudsters led by
Salomon analyst Jack Grubman (settled for $15 million in SEC fines to avoid prosecution)
to CS First Boston's Frank Quattrone, arrested by the FBI this week. Holly Becker next.

Wall Street hotshots are groomed by the nation's business schools, of which I graduated
three times with a BS, an MS, and an MBA. Ethics was not taught nor was it mandatory.
When I tried to discuss ethics in class with fellow students, foreign kids did not know
the word, and the American MBA's (most working full-time) had one goal, get ahead fast.
Ethics is contradictory to big money and profits. Ever heard, "Nice guys finish last?"
As long as the likes of Dick Grasso are allowed a forum to proclaim a phony integrity,
small independent investors will stay away from the NYSE listed issues, 2800 in doubt.
Dick Grasso is the biggest voice on Wall Street, but then the NYSE is Grasso's casino.

Ted Turner of CNN blasted Rupert Murdoch as a "warmonger" today for the FOX Network's
biased patriotic and one-sided reporting of the Iraq mess. Ted spoke that 90% of the
TV and print media in the U.S. is controlled by only five networks, all pro-Bush and
lacking independent reporting, thus destroying credibility of American news reporting.
Tonight NBC's Tom Brokaw had a televised interview with Mr. Bush, seen on CNBC, MSNBC.
CNBC is owned by GE, parent of NBC, and for years paraded Dick Grasso as a deity second
only to former New York City mayor Rudy Guiliani, despite Dick Grasso's involvement in
the $1.4 billion fraud settlement agreement for Citigroup and Grasso's friend CEO Weill.
Grasso brokered settlement talks during Manhattan SEC lunches for many months in 2002.

While Citigroup made $10 billion on the IPO's for Worldcom, Metromedia Fiber Network,
Global Crossing, and Winstar, Grubman pocketed $100 million in fees, Grasso was having
lunch with Weill. CNBC broadcast Grasso's desire to eliminate day trading accounts from
the NYSE with less than $25,000 in assets (August 2001). September 11 solved Grasso's
problem as he was allowed to close the exchange for a week forcing margin calls on the
American investors on margin to eliminate them all at once. Bankruptcies by Worldcom,
and other Salomon telecom IPO's devastated the remaining small traders Grasso opposes.
To Dick Grasso, any day trader with less than $25,000 to play is a peasant nuisance.

Back in 2001, I waited patiently to buy telecoms selling at 85% below their 2000 highs.
I trusted Citigroup, Salomon Smith Barney, and telecom analyst Jack Grubman for advice.
With the admission of fraud in the settlement for Citigroup, small investors will now
be able to sue for return of their investments. My retirement account was in telecoms
recommended by Jack Grubman of Citigroup's Salomon Smith Barney unit, and is worthless.
Jack Grubman made $100 million off the likes of me. While I need $5000 for operations,
and have nothing, Grubman paid $1 million to put his kids in the best private schools.

Back in 2000, CNBC pedestaled the likes of Jack Grubman, Holly Becker and Henry Blodget.
No CNBC announcer questioned integrity of Citigroup, Salomon, and Merrill's analysts.
Rightwing CNBC is too busy promoting GE, Jack Welch, Dick Grasso, and the war on Iraq.
CNBC runs General Electric commercials all day long, since GE owns CNBC. Ever hear the
one with the auto-painting robots who have nothing to do since GE colors car plastics?
The voice is Alec Baldwin, that's right, Kim Basinger's bleeding heart liberal hubbie,
arch supporter of Bill Clinton. Why is he doing GE commercials? Money, not for ethics.
Just so you know, lack of ethics is not limited to Republicans, but rampant everywhere.
That is what freedom is. The open society which allows everyone to rip or be ripped off.
Freedom is what animals in jungles have, on Wall Street, it is survival of the ruthless.
There are small sucker fish which attach themselves to large sharks to get a free ride.
The difference is sharks don't give public press conferences to proclaim their honesty.

Nasdaq Composite Index closed 1,434.54 -22.69 at 0.1% above trend. Stochastics 28%/78%.
Nasdaq opened weaker despite a 4-point gain in Amazon, sold off to down 20, and stayed
at the uptrend line (seven-day moving average) for the rest of the day. Blame the GDP.
Or blame the GOP. The GOP is responsible for the lousy GDP. The GOP blames Sept. 11.
Nasdaq is okay, for months I have written domestic Nasdaq tech would outdo Dow Jones.
The key level is at 1425, formerly resistance, that 1425 now is very important support.

Tech-heavy Nasdaq has broken out, but it is led by Internet darlings eBay, Yahoo, and
Amazon, which reported a pro-forma $0.10 net income Thursday vs. expectations of $0.04.
Amazon loses money, and always has. Pro-forma earnings take out non-recurring expenses
on the premise operating earnings will not be affected by one-time charges in future.
The TV media reports these pro-forma earnings without disclaimer, and traders trade on
pro-forma with little regard to reality. After reporting a pro-forma gain, AMZN jumped
$3.85 to $28.97 Friday, the only green in my long list of stocks written up this year.
Scanning the 35 stocks I track, only Amazon, Lucent and General Electric rose on Friday.

XAU closed 65.53 -0.63 (-0.95%) at 2.1% below uptrend. Stochastics oversold at 2%/22%.
As if OPEC raising production quotas and Iraq beginning to pump it up again was bearish,
now Sunni Muslims in Iraq are demanding that the U.S. get out, joining those 12 million
Shiite Muslims in Iraq would don't want another Uncle (Sam) in the family get togethers.
Donald Rumsfeld waved his arms frantically when asked about 3 Afghan teenagers in Cuba,
bound, gagged and tied in orange jumpsuits with 657 Taliban. Donald snapped, "teenagers
kill people in the U.S. too." Last I read, teen juvies are not incarcerated in a genpop
(general population) with Arian brothers, the boys from the 'hood, and barrio homeboys.

Rumsfeld was then asked why the Iraqi prisoners (the ones whose faces appear on cards)
are not transferred to Cuba detention, and Rumsfeld ranted, "waste of taxpayer money."
Like spending $20 billion to invade Iraq and $100 billion for Mars landings is useful.

Gold likely is not watching politics so much as a freefall in U.S. trade in retaliation
for government policies like travel bans to Toronto. Ontario called citizens to boycott
U.S. travel this summer, and buy Canadian after tourism in Toronto has fallen by 80%.
When U.S. travelers depart from Philadelphia to Toronto, they are given a yellow card
with warnings that the U.S. is not responsible if travelers get quarantined for SARS.
Canadians traveling from Toronto to Philadelphia take the yellow cards, then toss them.
The travel ban proposed first by the U.S. CDC, then the WHO (as the CDC backed off) has
cost Toronto and the Canadian economy some $50 million in lost tourism and conventions.
Even a busload of Canadian high school kids was disinvited by Pennsylvania this morning.
Today's Bush inspired paranoia is so thick a Canadian school trip is deemed threatening.

SOX closed 324.95 -17.06 (-4.99%) at 2.1% below new downtrend. Stochastics at 4%/59%.
I wrote all week the Semiconductor Index appeared to be finishing a classic five wave
Elliott Wave pattern (12 weeks) and that 50-day trading rally in chip stocks was done.
TV media blamed a severe SOX plunge on industry sector downgrade by Smith Barney, and
worries about SARS when Taiwan announced that 1000 (on CNN) to 2000 (on CNBC) Taiwan
hospital patients have been quarantined there on Thursday. Taiwan is the most crowded
place on earth next to Times Square in New York, making spread of SARS easy and fast.
Taiwan is also the center of gravity for the chip production business with Taiwan Semi,
United Microelectronics and Acer making chips and laptops in Hsinchu's Industrial Park.

ELN closed 3.27 -0.19 (-5.49%) at 2.8% over a breakout trend. Stochastics fell 63%/80%.
Subscribers bought Elan at 2.85, and should have raised an ELN stop loss order to 3.00.

AMZN closed at 28.97 +3.85 (+15.3%) at 10.6% above its uptrend. Stochastics 100%/60%.
Amazon.com is up 53% from 19 to start this year, on a smoke and mirror earnings mirage
that even the greatest skeptic admires. Amazon sells books online at the lowest prices.
Sales ballooned recently when Amazon offered free shipping. Expectations were for $0.04
per share pro forma income and when AMZN reported $0.10 Thursday, it gained 15% Friday.
Unfortunately for Nasdaq, Amazon was the only Internetter to show gains to end the week.

The following is my strongest buy recommendation, up from a low 1.05 in January, 2003.
PCLN closed 2.02 -0.02 (-0.99%) at 1.0% above an easing uptrend. Stochastics at 25%/45%.
As always, if you buy these low priced stocks, enter a Stop Loss at 10% below purchase.
You may get stopped out a lot, but that is better than watching risky issues drop 50%.

The following Internet stocks are strong buys, but overextended. Buy on 10% pullbacks
from April 23, LVLT 6.26, EBAY 94.32, YHOO 25.60, and AOL 14 (price when recommended).
Level 3 Communications has already dropped 10% from when I mentioned it, AOL lost 5%.

LVLT closed. 5.66 -0.18 (-3.08%) at 3.2% below weak uptrend. Stochastics at 8%/32%.
EBAY closed 93.47 -1.17 (-1.23%) at 1.6% over solid uptrend. Stochastics at 78%/92%.
YHOO closed 24.96 -0.49 (-1.92%) at 0.6% below soft uptrend. Stochastics at 4%/35%.
AOL -closed 13.32 -0.48 (-3.47%) at 0.5% over sweet uptrend. Stochastics at 45%/75%.

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