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.
SMD June 28 How To Trade Index INTEL Review STOCK PICKS

NASDAQ COMPOSITE
INDEX closed 2004.16

Nasdaq Headed Down to Test 1950
Sun., July 8, 2001

******************Commentary*******************
July 8. A short-term Nasdaq chart breakdown occurred on Thursday. Nasdaq closed below 2100. Everyone jumped out Friday morning with close below 2100. While pretty-faced media touts blamed employment report, told us not to worry because a disastrous Nasdaq breakdown was on "light volume" (irrelevant, you still lose same money amount), heads of brokerage firms were licking their chops at prospect of whip-sawing the public. Goldman, Lehman, Morgan and Merrill Lynch are firms whose analysts love to trash Nasdaq technology stocks. What do they gain? Commissions on your panic sales, more when they get you back in for their "summer rally" 2 weeks from now. Good luck. INTEL hit $31 and failed near the top end of $26-32 trading range (5th time since April 18). RSI, MACD turned negative Friday, stochastics plunging to deeply over-sold (vs a very over-bought 80.28/39.63%). MSFT hit $72 for the third time since April, and promptly dived with stochastics falling to extreme over-sold levels despite appeals court news that media played up as bullish (LOL) (vs falling 66.37/45.42%). MACD, RSI became negative Tuesday. Failure to stay above $72 is evidence that investors do not like present management of the firm. Worse still is a reaction to appeals court ruling by Bill Gates, whose lack of warmth and sincerity is over-whelming. Support is still at $62. CISCO is headed for new lows. RSI, MACD have given a sell signal, yet stochastics are over-sold (vs a very over-bought 79.10/31.83%). CISCO had a significant failure to break $19 on the last move higher, because mutual growth funds still dumping these networking stocks. ORCL traded at $20 four days in a row, the top end of trading range. RSI is still positive but fading fast, stochastics plunging but not yet over-sold (vs over-bought 91.02/71.34%). ORCL left noticeable gap to be filled at $15.40-16.40. Larry Ellison instills confidence in no one. WCOM has the best upside potential technically and fundamentally from bottom of $14-20 trading range, stochastics are very over-sold. The same funds that have been dumping telecom stocks for 4 weeks to get these out of their portfolio statements for end of June quarter will start buying telecom stocks back this month as "VALUE plays" DELL RSI, MACD neutral, stochastics falling but not over-sold (vs over-bought 76.63/36.77%). SUNW stochastics very over-sold (vs extremely over-bought 84.21/21.94%). MACD, RSI turned negative. SUNW appears to be in trouble with Goldman Sachs analyst Laura Conigliaro downgrading May 29. Nasdaq tech stock weakness mid-June ended with solid over-sold bounces in Intel, Microsoft, Cisco, Oracle, and Dell from Nasdaq 1980, so on Nasdaq intermediate chart, support remains at 1950 and Monday will be 5th test since mid-April.
Diversify to JAPAN ADR's or go North for CANADIAN STOCKS.
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