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 May 14 Trade to Win Sitemap Nasdaq Big-Cap Research

NASDAQ COMPOSITE
INDEX closed 1701.59

Nasdaq headed for 1600 - May 21, 2002

******************Page ONE*******************
May 21. Go To Page 2 Nasdaq Composite closed at 1701.59 -May 20. Nasdaq has gained just 49.05 (2.9%) since May 14. Bob Hormats, the Goldman Sachs Chairman, had these brilliant observations on CNN, "well, we(?) have unemployment, and the consumer is not spending," when he was asked what major problems he sees this year for the U.S. economy. From the same Goldman Sachs who gave us Abby J. Cohen with her S&P target of 1650 by yearend 2001, some 53% higher than today's S&P 500 close. Word is Merrill Lynch will pay $100 million to make New York's Attorney General stop without pleading guilty. When poor people are convicted, they go to jail. When stock brokers are guilty, they buy their "Street" freedom. On 10-day chart, Nasdaq 0.2% below moving average resistance at 1705. Short-term direction down after Friday's stock option expiration. Short RSI, MACD went negative, stochastics closed neutral. Monday, stochastics finished 40%/32% rising from over-sold in the morning. Short-term, Nasdaq is ready to fall on profit-taking from last week rally (options expiration). Traders will try for chart gap target from 1582 to 1636 (left on May 8). Nasdaq did not completely fill this chart gap in the vicious May 9-10 selloff to 1600. Last week's rally was premature short-covering ahead of Dell's earnings. Hey DUDE, you got a LOSS! if you bought into the hype (takeoff on Dell's stupid TV commercial). The media played last week rally as "the real thing" yet more selling is coming. Monday, TV media blamed a sharp opening selloff on renewed terrorist warnings. Readers know I forecasted the Nasdaq would rally straight up to 1760 and start falling long before Sunday's terror announcements by Vice-President Dick Cheney. On intermediate 90-day chart Nasdaq is 0.2% over its 90-day moving average support at 1699. 90-day RSI, MACD turned positive last week, went negative Monday. 90-day stochastics fell from last week's very over-bought to 18%/60%. Two back-to-back weekly gains in Nasdaq (2.4% and 2.9%), ARE NOT hard evidence of a new bull market like CNBC is proclaiming. When Nasdaq starts the real BULL move, the average weekly gains will exceed 10%. Next for Nasdaq is 1600. Last week, traders were trying to fill a chart gap from 1760 to 1798 (left on April 22). This goal was made Wednesday when Nasdaq hit 1760. Nasdaq should decline again to test the low at 1580. My readers know for five months I have advised 100% commitment at Nasdaq 1620. Long-term Nasdaq moving average support stays 1685. Nasdaq trying to make a bottom, but so difficult with erosion in public confidence in U.S. government ability to provide economic solutions for our 2-year Nasdaq Tech Stock Bear Market. RSI, MACD negative, neutral stochastics at 58%/48%. Long-term chart forecasts a potential June bottom after some base-building through Memorial Day Holiday.
How to Use Site. Profitable Market Analysis. Top Nasdaq Big-Caps
Copyright Notice, all pages Copyright©2002 and are made available as a service to the global Internet community. Pages may not be reproduced or sold in any medium without explicit, written permission from Steve Zito.