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February 2 2002 (palindrome day; wonder what George Soros is doing) A two month broadening formation appears to be in process. A bearish process. Last Wednesday's sell off was a neat bear trap for the trigger happy. We continue to think that out or short is the way to be in these markets. If the present action is indeed a broadening top we should see a top above the January top. That could be a wonderful place to get short. The S&P and NASDAQ show the same tendencies as the Dow, perhaps even weaker, and we would speculate showing the future direction of the Dow. |
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February 9 2002 A broadening formation in October, one in November, one beginning in January. Bear tracks. One of our cynical friends remarked of the Jan end of month rally that the fund managers were dressing up their portfolios. The fund managers are all checked in to the luxury suites on the Titanic. Some analysts see collapse here. It is not impossible. If Osama said boo the markets would take more of a powder than Congress. And the process of Enronization may have just set in. Analytically this bear market rally started in September and may be tracing out a rounding top. Don't be depressed. Be short. The NASDAQ chart may be telling us more than the Dow chart. That is, breaking the path for the Dow. A word to the wise is sufficient. You have to hit a fund manager in the head with a two by four. How many billions did they let go down the drain with Enron? So much for fundamental analysis portfolio management. |
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February 18 2002 Broadening formations are the mark of markets without sponsorship, or markets with naive participants. They are also the mark of markets where opinion is widely divided. Usually they are topping formations. We will have further comments later in the week on activity since mid-January, which is best characterized as weird. To have the least positive prospect price would have to climb back above the 5 year trendline which at this point means above 10800. We continue pessimistic advising shorts, hedges and longs only in the most long range and unusual of situations. |
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