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 for investment decisions.
Nasdaq Aug.13 Nasdaq Aug.6 INDEX *INTEL REVIEW* EMAIL

NASDAQ COMPOSITE
INDEX closed 3930.34

Five of 9 indicators are POSITIVE
Sun. August 20, 2000

******************Commentary*******************
August 20. Nasdaq rose 3.72% last week as Dow Jones did nothing. For two weeks, TV media have touted old economy stocks. Too bad media analysts never studied economics. They would have learned that current rising interest rates have a greater impact on old economy stocks than Nasdaq. The recommendations of high-priced brokerage analysts are not much better than cable TV announcers. In November, a semiconductor analyst at the largest brokerage downgraded INTEL at a split-adjusted price of $42. INTEL fell $6 to stabilize around $36 for a month, while Nasdaq soared to record highs. INTEL did not play "catch up" until March. Then that firm recommended INTEL at $73, and again last week, just as INTEL rose above $70 for the third time this year. Yes, that same analyst who downgraded INTEL at $42 last November, recommended it on TV last week at $70. A regular "Joe". Brokerage recommendations guarantee losing money. You can watch these analysts every day on cable TV, putting you into losers. If you want to make money, study my INTEL REVIEW and then buy AMD. Dell is pathetic since it hit $53 on July 14, due to over-valuation, high P/E ratio, over-bought stochastics, and 100% consensus to buy from brokerages. Why do analysts recommend buying Dell? Analysts with $200,000 salaries are afraid to go against consensus in their industry. Dell daily stochastics at 30.79/26.36% are not over-sold enough for a good rally and MACD IS STILL FLASHING SELL! On July 16, I said Dell had to drop 50% to become reasonably valued. Since then, arch-rival Compaq Computer, CPQ has risen to a 52-week high. Both companies have almost the same earnings per share, yet CPQ is five points less than DELL. Not hard to figure that CPQ is a better value. Why has CPQ been lower? Since 1999, there was a popular cable TV stocks editor (another regular "Joe") bad-mouthing CPQ every time CPQ traded above 30! By his own admission, this cable TV stocks editor does not even know how to use a personal computer! The U.S. economy must be very strong if this editor can find work! Intel has a high P/E of 52.38 and over-bought daily stochastics at 75.51/62.09%. Aug. 13, I mentioned Intel stochastics were over-sold, ready to rise. Last week it had a 10.6% surge. Cisco shows a P/E of 177.37, a triple top at 70, weakening daily stochastics at 44.64/47.63% as first noted July 24. Since July 26th, MSFT is 3.9% higher while Nasdaq has lost 1.6%, but MSFT is stalled with neutral daily stochastics 49.57/53.65%. I added MSFT at 69 to the Model Stock Portfolio. Weakening Oracle became over-bought with daily stochastics at 80.67/79.82%, is a sell. Worldcom is the best value with a P/E of 20.5, rising daily stochastics at 28.95/25.26%. Similar is Sprint FON, very over-sold with low P/E of 16.21, MACD FLASHING BUY and daily stochastics at 16.27/20.13%.
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