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 July 10 How To Trade Index INTEL Review *HOME PAGE*

NASDAQ COMPOSITE
INDEX closed 2067.32

Will Nasdaq Fall Again to Test 1950?
Tue., July 17, 2001

******************Commentary*******************
July 17 Are shortsellers and hedge funds holding Nasdaq under 2100 and getting ready to crush it next week? After all, Alan Greenspan has opened up the money spigots this year for all his Wall St. cronies (the heads of money center banks). With online banking taking customers, Citigroup and peers are looking to their trading operations for profits. What better way to make trading gains than to sell short technology stocks on Nasdaq and let Lehman, Goldman, Morgan, Merrill Lynch downgrade yet another tech sector. Merrill Lynch analyst Joe Osha announced today that Intel is a "SELL" above $30. Intel immediately dropped from $30.75 to $29 in after hours trading. Isn't Joe Osha that same Merrill Lynch analyst who upgraded Intel to buy when it went above $72 one year ago? Why are these analysts employed, if not to whipsaw the public out at the bottom to generate commissions for the brokerages. Churn 'em and burn 'em. Joe Osha is analytic with Intel's business prospects for the next six months, but does not know how to quantify stock prices. Investor psychology called SENTIMENT is in every trade. I forecast that Intel is RANGE BOUND. It should be sold near $32 and bought at $26. Lehman, Goldman, Morgan and Merrill are brokerages which have downgraded Nasdaq technology stocks. One heavy set Goldman analyst even reversed her own downgrades June 6 one week after blasting Sun Micro May 29. Why did the same analysts tell us to buy Nasdaq technology stocks 1 year ago at 4289 Nasdaq if business is so bad? Many Internet darlings from last year are down 95%, if they are still in business. Short-term Nasdaq chart has neutral RSI, MACD; over-bought stochastics. The intermediate Nasdaq chart shows the same neutral RSI, MACD, and intermediate stochastics are over-bought. Of last 4 rallies, 3 lasted exactly 5 days. The current rally is 4 days old and most likely will end by Thursday. The rally, fueled by Friday's stock option expiration, is stock buying by institutions selling options. I expect Nasdaq to fall hard next week and test 1950. Earnings for tech stocks are dismal, worst in ten years. Intel reported $0.12 per share today. With usual misleading reporting, CNBC's Carl Quintanilla got excited about them maintaining capital expenditures. According to my research, Intel always had major stock declines in years in which Intel's capital expenditures rose by 50%. Cable TV media tells you over and over stocks turn up well before the earnings improve. They also tell you that Alan Greenspan is a genius. Nasdaq is still overvalued, and it will take months to break out of its trading range between 1800 and 2200. Greenspan caused the current recession and Nasdaq price collapse with misguided economic policy, and judging by the cryptic remarks he delivers, the dude hasn't got a clue. The unemployment rate will be 5.5% before economic recovery.
Diversify to ASIAN ADR's or look North for CANADIAN STOCKS.
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