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 June 19 *Stock Picks *Sitemap *Options *Subscribe $10

NASDAQ COMPOSITE
INDEX closed 1403.80

July 2, 2002 - Blame the Government?

******************Page ONE*******************
July 2. Go To Page 2. Nasdaq Composite closed at 1403.80 on July 1.
Nasdaq has fallen 139.16 (9.0%) since the June 19 page. On a 10-day chart, Nasdaq is 1.3% below moving average resistance at 1422. RSI and MACD went negative with stochastics over-sold for 2nd day in a row. Monday, stochastics ended 2%/1%, lower than in the 125-point plunge June 18-21. Short-term, Nasdaq is very over-sold but investors have lost all confidence in CEO's, auditors. Normal technical analysis is useless when stock markets are in panic freefalls. Stock markets not reacting to interest rates, the economy, politicians, but only fear. With technical analysis ineffective in the coming two weeks, expect trends to continue. What appears like a bargain today may very well become clearance. On intermediate 90-day chart, Nasdaq 3.1% below moving average resistance 1449. 90-day RSI, MACD negative since May 28, as the current 16.4% fall began. In the last week of May, the Nasdaq was about 1680, and plunging ever since. 90-day stochastics cratered from over-bought on Friday to Monday's 21%/60%. The intermediate stochastics forecast continued steep decline Tuesday, July 2. There is no longer any sign in intermediate data of a bottom being formed. Long-term Nasdaq moving average resistance is 1516. The Nasdaq two-year moving average is still at the lowest levels in Nasdaq's 23-month Bear Market. Nasdaq has been trashed for 2 years by the very same Wall Street brokerages who preached 10,000 for Nasdaq in 2000. For example, Abby Joseph Cohen (Goldman Sachs) published a report with 1650 as her S&P 500 Index target (Dec. 2000) while Goldman's technology analyst Laura Conigliaro downgraded major technology stocks like Sun Microsystems, causing them to fall as much as 92%. Only one year ago, brokers reported record profits even with Nasdaq already down from 5200 to 2100, now Goldman blames the bear market on Congress. L/T RSI, MACD negative, over-sold stochastics remain hopefully bullish at 10%/12%. Intel closed at 17.54 -0.73 (-4%) below moving average resistance 18.70. RSI, MACD negative, stochastics plunged to extremely over-sold 2%/25%. Pre-bubble November 1999, Merrill Lynch downgraded Intel at 80 (pre-split), trashed it to 72, and over the following six months Intel went straight up to 144 (pre-split). Joe Osha replaced the 1999 Merrill semi analyst, and has been just as wrong. Merrill Lynch Joe Osha downgraded Intel on June 13, 2002, comparing it to a Japanese real estate bubble when Osha worked in Japan for 5 years, in his CNBC spot. If I was him, a Wall St. analyst, I would plead insanity. Summer seasonally slow for chip-makers Intel and AMD, now is the time to buy. Intel now and AMD at 6.99 on my recommended list for semiconductors. AMD is operating at the B/E level, should be profitable in the 4th Quarter. Also, take E-business consultant ACN at 12 as stock drops from Arthur Andersen scandal.
How to Use Site. Carving up 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.