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 on for your investment decisions.
*Nasdaq May 24 *1 Year Ago *Sitemap *Intel *Subscribe for $10

NASDAQ COMPOSITE
INDEX closed 1562.56

June 4, 2002 - Nasdaq to hit BOTTOM soon

******************Page ONE*******************
June 4. Go To Page 2 Nasdaq Composite closed at 1562.56 on June 3.
Nasdaq has fallen 135.07 (8.0%) since May 24. Both CNBC and CNN brought out long-time bears Monday, in TV interviews: Gail Dudack, SunGard Institutional Brokerage managing research director; and UBS Paine Webber Mgn. Director and Investment Strategist Mary Farrell. Both NEGATIVE on U.S. markets despite admitting economy is better. Both women were also negative on U.S. markets in the middle of 1999. Both are examples of highly paid but inaccurate brokerage executives. CNN MoneyLine was kind enough to do its "Quick Poll" for viewers on whether plunging stock markets are more influenced by renewed international tensions or domestic accounting frauds. Over 74% of CNN responses linked current U.S. market declines to investor lack of confidence in audited financial statements. No trust in the large most respected audit firms (A. Andersen) and loss of confidence in CEO's (head of Tyco resigned, El Paso treasurer committed suicide) topped off by Lou Dobb's (CNN) daily on-air defense of auditor Andersen as completely innocent, despite their partner David Duncan's guilty plea to obstruction of justice and criminal trial now underway in Houston. The brokerages were quick to pour fuel on the fire, as Merrill Lynch again downgraded the software space, sending Siebel, Sybase, and Oracle into a downward spiral to its 2-year low. Not surprisingly, the news that the SEC settled with Microsoft for accounting irregularities sent MSFT down too. Don't expect a Bush administration to restrain Microsoft's monopoly. The Bush administration is more interested in spying on your kid's PC emails. Monday, Nasdaq plunged from 1584 at 3:00 PM to 1562 at 4:00 PM closing. It is not the start of something significant. What TV announcers and stock market newsletter writers promoting momentum and A/D lines are failing to realize is that when the Nasdaq crashes 22 points in one hour, it is more likely to rally the next day than to continue that type of excess fall. Imagine you throw a ball into the ground hard, would it be more likely to go ever deeper, or to promptly bounce back above your head? Then you might ask, why has Nasdaq managed to slide if the economy is now improving? The economy is improving for the upper middle class with real estate. Poor, low middle class are saddled with credit card debt and low pay. Preliminary data for Friday's release of May employment and non-farm payrolls possibly leaked Monday to Wall Street players selling early. When 6.2% unemployment is reported on June 7, Wall St insiders will already be out and waiting to buy up what the public starts dumping. In coming months, U.S. interest rates will be held down as the Federal Reserve will be forced to address the ever growing U.S. jobless pool. All stockbrokers will be pushing "Summer Rally" in the next 2 weeks.
How to Use Site. Innocent Arthur Andersen? 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.