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 relied upon as advice on investment decisions.
Nasdaq Jun 16 How To Trade Index Intel Review STOCK PICKS

NASDAQ COMPOSITE
INDEX closed 2028.43

Final Rally Over, Retest of 1950 Soon
Sun., June 17, 2001

******************Commentary*******************
June 17. Lehman Brothers, Goldman Sachs, Morgan Stanley DW and Merrill Lynch have downgraded technology stocks since May 29 and trashed the Nasdaq. What did the TV media do? Sensationalized and sang the praises of the analysts such as Goldman's Laura Conigliaro and Lehman's Dan Niles. When they were not selling their mediocre books CNBC announcers were describing Nasdaq's worst week of the year (an 8% loss) with smiles, jokes, and laughter just like they did in April at Nasdaq 1620. CNBC bigmouth Maria Bartiromo at one point told viewers last week "we are already in the second half of the year, folks." Right. I believe that there are still 2 weeks left in June, sister. Congress is finally investigating brokerage house analysts and their relationship to companies ratings. These brokerages claim that their analysts do not talk to their investment bankers. It is unfortunate that Congress does not investigate the hype presented by TV media who glorify strategists and analysts. Last year, Goldman's Abby J. Cohen, the brokerage's chief strategist, said the S&P 500 was 25% below her "fair value". Remember when Nasdaq was over 5,000? So why is this person put on a pedestal by CNBC? Nasdaq 10-day stochastics moved higher from Fridays (AM) oversold condition to 47.93/28.65% (vs rising 51.43/59.67%). RSI negative as index has broken support at 2040. Nasdaq 90-day stochastics over-sold at 13.24/44.40% (vs over-sold 31.17/54.56%). Over-sold intermediate bounce is expected only when the Federal Reserve cuts interest rates again. Nasdaq 2-yr chart seriously closed below moving average, stochastics falling rapidly at 51.46/69.77% (vs over-bought 75.71/64.59%). The stubborn long-term over-bought condition forecasted that previous rallies limited to 2300. Traders took gains, but investors will never recover, unless they are concentrated in the ever shrinking group of rising stocks this year. INTEL moved off the bottom of a $26-$32 trading range, stochastics over-sold at 11.66/58.90% (vs bullish 52.11/48.83%). It's a BUY at $26 just like it was May 31 for a move to $32. MSFT stochastics falling at 22.04/64.18% (vs rising 73.01/63.02%). MACD neutral, RSI oversold. CSCO stochastics very over-sold and falling at 4.46/36.73% (vs over-sold but rising 22.12/49.14%). MACD negative and heavy increase in trading volume on the selloff. ORCL stochastics deeply over-sold at 11.97/52.48% (vs rising 39.56/40.72%). WCOM has upside potential at the bottom of its $15-20 trading range, stochastics very over-sold at 9.83/32.60% (vs weak 45.34/52.05%). DELL stochastics are very over-sold at 3.08/43.20% (vs neutral 27.36/54.32%). MACD, RSI negative. SUNW remains most over-sold of big-cap Nasdaq at 4.68/16.93% (vs very over-sold 1.06/42.02%). Are you ready for CAPITULATION? Tired of losing U.S. stocks? Diversify north-CANADIAN STOCKS.
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