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 June 17 How To Trade Index Dell Report STOCK PICKS

NASDAQ COMPOSITE
INDEX closed 1992.66

Nasdaq Setting up for TEST of 1950
Tue., June 19, 2001

******************Commentary*******************
June 19. INTEL moved near the bottom of its $26 to $32 trading range today as I said it would on June 17. It is a BUY at $26 just like it was May 30 for an upside move to $32. While TV media at CNBC promote the always wrong opinions of Lehman Brothers Dan Niles, who will continue to lower revenue estimates for INTEL throughout this year, INTEL has held up despite a weakness in bigcap Nasdaq tech stocks. When they are not promoting themselves, trite CNBC announcers are laughing and joking to viewers still reeling from Nasdaq's worst week of the year (down 8.4%). With smiles and giggles, CNBC prima donna Maria Bartiromo is telling viewers with glee "I am number 6 on Wall St. Journal's best seller book list folks." Who cares? Investors want more money. They don't want to hear how great you are. Your analyst friends have not been right about tech stock target prices for 2 years. Congress is finally investigating brokerage house analysts and their overblown target prices for stocks they may own. These brokerages claim that their securities analysts do not talk to investment bankers. That is a crock, folks. In April, Lehman's analyst Dan Niles said his favorite stock was Compaq Computer-CPQ at $22 in a TV interview by his CNBC friend Maria Bartiromo. Compaq Computer has fallen 39% since that interview, while Dell is only down 5%. So what does Dan Niles do? He switched to favor Dell over Compaq last weekend. Nasdaq 10-day stochastics moved lower to 21.20/28.02% (vs Friday afternoon's rebound 47.93/28.65%). RSI negative as index is trading below resistance at 2005. Nasdaq 90-day stochastics became more over-sold at 5.03/35.62% (vs 13.24/44.40%). How low can Nasdaq go? Around 1950, just before the Federal Reserve cuts interest rates next week. Even with brief rallies, telecom sector is in free-fall panic stage, easy to have forecasted when Nasdaq 2-year chart fell below moving average last week, stochastics still falling rapidly at 26.88/69.31% (vs 51.46/69.77%). The stubborn long-term over-bought condition from late April to early June capped rallies at 2300. Brokerages made great profits putting investors into overvalued financials, banks, cyclicals touted by their investment bankers. INTEL stochastics are still very over-sold at 9.04/47.23% (vs over-sold 11.66/58.90%). It's a BUY at $26 despite what Maria Bartiromo's analyst friend Dan Niles says. MSFT stochastics now over-sold at 16.93/50.72% (vs 22.04/64.18%). CSCO stochastics very over-sold but stabilizing at 5.47/29.83% (vs very over-sold and falling 4.46/36.73%). MACD and RSI are negative. ORCL stochastics rising nicely at 74.31/51.04% (vs deeply oversold 11.97/52.48%). Investors have forgotten what management did Mar 1. WCOM has upside potential at the bottom of its $14-20 trading range, stochastics at 8.61/23.05% (vs oversold 9.83/32.60%). DELL oversold stochastics at 16.67/37.14% (vs very over-sold 3.08/43.20%). MACD, RSI remain negative. SUNW over-sold stochastics at 9.09/16.76% (vs very over-sold 4.68/16.93%). Diversify north-CANADIAN STOCKS.
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