MASTERING
THE TRADE
ORIGINAL, INTERACTIVE
SEMINAR ON TRADING USING
TECHNICAL ANALYSIS
EARNINGS
ESTIMATES
U.S.
QUOTES
U.S.
CHARTS
TECHNICAL
OPINION
CANADIAN
CHARTS
SEC FILINGS
BROKER
RESEARCH
MORNING
COMMENTS WEEK OF 5/01/00-5/05/00
5/05/00
5/04/00
Note:
The Tulips AM market commentary will return from its month long hiatus
tonight (May 4th)...in the meantime, a few observations, both long-
and short-term: overnight futures indicate a bounce at the open, a bounce
that may be given sustenance if pre-Greenspan jitters give way to
post-Greenspan relief, but we would not view any rally that develops today
as an opportunity to engage in the national pastime of 'buying on the
dip', instead we would use the opportunity to sell into the rally.
The market's current leg down is likely
to include a retest of the lows: for the Dow Industrials, a retest of the
March low of 9731, for the NASDAQ Composite, a return visit to the October
lows of 2600-2800. Rallies may develop at these levels, but in all
likelihood these rallies will prove to be short-lived.
The inability of the Fed's rate hikes to
date to slow the economy indicates the pain is likely to get much worse
before it gets better. The current consumer spending driven economic
boom is unlikely to slow to a sustainable pace until the wealth effect is
tamed--an event which will not occur until the two principle drivers of
the wealth effect, a booming labor market and above-historical trend stock
market gains, go into reverse. When the current rate hike cycle
ends, the major averages will likely be trading within their historical
valuation ranges--a level which is still a considerable distance below the
market's current levels.
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Last modified: April 02, 2001
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