Dr. John Faessel - On The Market (SPX, SOX, INTC, KLAC, IBM, AMAT, TXN, NOK, STM, AMD)
9 Jun 2003, 07:36am ET
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212-713-5793 onthemar@yahoo.com ROUND TRIP - AGAIN - and a BLOWOFF ALARM Friday's round trip on big volume- from an early burst to the top of a tight 13-day channel - then a reversal to the lower limits border was a stunner of a 'distribution' sell signal. This was the fourth hellacious reversal candle of the run that began on March 12 - yet we have plowed higher with just minor pullbacks in spite of the first three sell signals. Sentiment overview's are now reading in tandem and ringing at market-topping levels, suggesting - sell. McClellan Oscillator ticked an 'overbought' high of +151 on Thursday, reversed to +104 on Friday close. There was a minor change read (-5) after Wednesday's +146 / Thursday +151. Minor change reads suggest a rip one way or the other usually the opposite of the trend, which was up. Therefore, it is calling for a spin down. Today we hang just above the lower boundary of the channel that has contained trading for 13 days, (the trajectory of which is, even more, straight up than the preceding channel that began on March 12th.) So there is a definite lower 'support line' that if breached will call in mucho selling. The bail out number is S&P 500 (SPX) 985. Go long at (SPX) 598. I just finished reading value guru Fred Hickey's, THE HIGH-TECH STRATEGIST (603-888-3954) - released June 5th. - and he's talking about pigs flying, frenzies, manias and a Market being 'pixie dusted' - needless to say, he thinks it's overvalued. Says - compared to 1988 to 1998 (not even counting the bubble top in 99 & 00) PE's of the top semiconductor index (SOX) stocks are now 100% overvalued. Using Price to Sales, it's 200% overvalued. He likes to plant 'put' options position on at 'tops' of rallies, when the Sentiment indicators read - too hot - like now. He does not short stocks. Fred says he has current 'put' positions in (INTC), (KLAC), (IBM), (AMAT), (TXN), (NOK), (STM) also says he has "lots of mobile phone exposure", read 'puts' there too. Likes - (AMD) stock, says their Opteron chip is a winner over the (INTC) Itanium chip that he says "is a dog". Says (AMD) s Opteron will get "a landside of support." Should say here that Fred has been 'really - really' right over the last 3-year Bear. He reads (sounds like) every report and listens to every conference call of the big Tech guys and is up - way up - on their stuffed channels, over capacity, forecasts (rarely believes), guidance, surveys, industry publications, etc. ta, ta. You want to go dig in after the time spent with his thoughts. *Latest May 31st Short Positions of - total NYSE and NASDAQ shares are 12.1 billion - that's down from the all time high of 12.5 billion of April 30th - off 400 million or 3.3 % for the month. As of Dec 31, 1999 - the total short was 6.3 billion.
