Steve Zito (MS Finance) is a member of the HTML Writers Guild
using economic and technical analysis to forecast direction of the stock market. The views in this newsletter are opinions only, and should not be relied upon as advice for investment decisions.
Nasdaq April 26 DOW April 28 INDEX Market Data INTEL Review

NASDAQ COMPOSITE
INDEX/RESISTANCE

Seven of 9 indicators are NEGATIVE
Wed. May 3, 2000

******************Commentary*******************
May 3. The Nasdaq Composite is not very far from 3600. Is there any trend? No. It has traded 400 points above and below for several weeks. The Nasdaq suffers a lack of direction. This will continue until the U.S. Federal Reserve lowers interest rates. Long term bond yields are high, offer a low risk 6.17% held to maturity, which may be SOON if the Treasury schedules bond retirement. The 2-yr., 5-yr. T-notes are at 6.50%, higher than 30-yr. T-bonds. The investment house strategists are on TV to explain the bad stock market calls they made last month and are causing today's investor dilemma. Notable is a TOP analyst at DLJ, who predicted a sharp rise in market on April 17 and recommended investors put 90% of money in stocks with the Nasdaq at 3600. Today, with the Nasdaq down another 5% for the day, that analyst was on every major business TV show, calling a bottom. Excuse me, didn't he say that two weeks ago? Why smart investors listen to this "guru" is a mystery. Gurus hustle at brokerages to generate commission revenue on transactions. The Nasdaq Comp is below 20-period exponential moving average, EMA on the 30-, 60-minute, daily, and weekly charts. Intel broke down March 28, forecasted on March 23. Intel is in a range of 110 to 130 which I forecasted on April 26 with the stock at 130. Today Intel is down at 119. Microsoft should be avoided until June on conclusion of antitrust. Cisco MACD, RSI, stochastics are next to positive. Oracle Corp and Dell are trading in line with moves in the Nasdaq Comp. MCI WCOM is the safest of the big six Nasdaq leaders, and WCOM has traded above support at 42 for the past week. I have added 50 June 55 calls on WCOM at 1/8 to the Model Portfolio. On the April 11, I predicted Nasdaq would trade in an 11% range from 3650, which it has. It hit 3230 at the low April 17, and rebounded over 800 points, 25% in 6 days, only to fall 400 points, 10% in the last 5. Why did it turn at 3230? The index bounced off the 20-month EMA, fueled by remarks from the same parade of TV gurus who are calling today's bottom "a buying opportunity". Remember, these are the gurus who brought us Internet stocks in December.
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