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.20 Nasdaq Aug.13 INDEX *INTEL REVIEW* EMAIL

NASDAQ COMPOSITE
INDEX closed 4098.35

Five of 9 indicators are POSITIVE
Thur., Sept. 7, 2000

******************Commentary*******************
Sept. 7. Nasdaq had an over-sold 2.12% bounce today but remains very weak as investors are cautious at this time of year and anticipate a correction. The Dow could be worse than Nasdaq next week as this year's rise in interest rates and resulting economic slowdown have a greater impact on industrial stocks than technology-laden Nasdaq. Evidence of investor confusion surfaced as recommendations of noted brokerage analysts began contradicting each other. Today a major broker called for MICRON to drop to $50/share while another brokerage analyst predicted a rise to $125. Last year, Merrill Lynch downgraded INTEL at $42 and INTEL fell to $36 for December while Nasdaq soared to record highs. Last month, that same firm's analyst finally recommended INTEL at $73 just as INTEL rose above $70 for the third time in year 2000. Yes, that same analyst who downgraded INTEL at $42 last November recommended it in August over $70! These highly regarded tech analysts guarantee losing investment choices because they only analyze the information that is spoon fed directly to them by the companies that they analyze. If you want to invest wisely, study the methodology in my independent, unbiased INTEL REVIEW and make your own decision. INTEL completely broke down last Tuesday from an extremely over-bought condition, and should fall quickly to intermediate support around $62. INTEL sports a P/E of 50.06 and plunging daily stochastics at 34.92/54.05%. CISCO has a ridiculous P/E of 185.06, a quadruple top at 70, falling stochastics at 48.74/59.65% similar to my observation July 24, and shows a broadening distribution pattern since mid-April. ORACLE has been over-bought since July with daily stochastics 83.69/85.20%. Buying ORACLE over $86 is very risky. DELL remains pathetic since it hit $53 on July 14, due to over-valuation, a high P/E ratio of 59.19, bad stochastics, and 100% buy recommendations from brokerages. If COMPAQ has the same $0.68 per share earnings as DELL, and CPQ sells at $32, about 20% less than DELL, why do analysts recommend buying DELL? These high-priced children are afraid to go against the consensus among peers for fear of losing their $200,000 a year jobs. DELL daily stochastics at 54.92/62.60% are not over-sold enough to support higher prices. On July 16, I said DELL had to drop 50% from $53 to be fairly valued. Since then, COMPAQ rose from $25 to $32.88 and DELL has dropped 24% to $40. On the buy side, WORLDCOM is a great long-term value with a P/E of 18.13, but should be avoided short-term due to downward daily stochastics at 29.40/46.60%. From July 26th, MSFT has been building a base around $70 and remains deeply over-sold with daily stochastics at 15.09/16.48%. Watch for a substantial upside move on any good news on the legal front.
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