When Sir Alan of Greenspan speaks, The Street listens. Or in this case, puke. As we had anticipated, the markets had set themselves up perfectly for another fall when Sir Alan all but insisted on not granting The Street’s wish for another “surprise” interest rate cut.

The DJIA grabbed another late-day rebound to cut its losses from over 200 points to close the day down “only” 142 (1.3%) at 10,495. The Nasdaq coughed up, err rather coughed down, another 56 points (2.5%) to close at another new 26-month low, at 2,152. Losing issues beat winners by a 2 to 1 margin. The Nasdaq has fallen in seven of the last eight sessions, and for the month of February it lost over 24%.

So what will it take to spark at least a short-term rally in the markets? Interest rate cuts haven't worked. Deeply oversold technical indicators haven't work. We don't know what will work, but since we're in the heart of a Great Bear Market, any rebound is likely to be sharp but short-lived. 

After the markets closed Wednesday, high-tech darlings 3COM and Gateway announced significant reductions in their earnings forecasts. Both the Nasdaq 100 and S&P 500 futures are trading well below fair value, so a rally on Thursday is dubious, at least at the opening.

Keep an eye on the Nikkei 225 overnight in Japan, as it has broken below 12,700 to a new 16 year low.

Grizzly's Daily Growl  Tues. 02/27/01  8:00 PM EST
Further evidence that the economy is already in recession took another 100 points out of the Nasdaq Tuesday, slam-dunking it to a new 26-month low. The Nasdaq Comp closed at 2,208, off 4.4% on the day. The Comp is now down 565 points (20%) so far in February, with one more day to go. The Comp has fallen in six of the last seven sessions. “Oversold” is an understatement, yet it hasn't been able to slow the Great Bear.

Grizzly's Daily Growl  Fri. 02/23/01  8:00 PM EST
We've been expecting a sharp counter-trend rally all week and it never materialized as the Nasdaq in particular has been standing in a deeply oversold swamp. Earlier this week Richard Arms, the inventor of the indispensable TRIN (Arms) index, said "the Nasdaq is the most oversold it has ever been." 

As they have done much of the past two weeks, the markets opened sharply lower Friday. The selling accelerated until 2:00 pm (EST) when rumors of a possible Federal Reserve interest rate cut next week laced their way across the country. (We're highly skeptical of another inter-meeting rate cut.)

The selling turned to wild bullishness within minutes, producing a sharp rally that pulled the markets up from the brink. Short-coverers and bargain-hunters were looking for an excuse to step back into the markets anyway, so they jumped on the bandwagon. (This all appears to be classic bear market action.) 

The DJIA recovered from an earlier 220 point loss to close the day down 85 points at 10,442. The Nasdaq managed to make it into the green for the first time all week, closing up 17 points at 2,262.

The markets remain in a very precarious position and the jury is still out. We think we're either right at the brink of an historic crash, or, the start of a substantial multi-week counter-trend rally. Monday's action will go a long way toward resolving the issue. 

Please take a moment to give us your thoughts on the Nasdaq. Cast your vote in our new online poll. Have a great weekend.  Grizzly

Grizzly's Daily Growl  Thurs. 02/22/01  7:00 PM EST
Well, it wasn't pretty, but the markets did manage to scrape together at least an intra-day rally of sorts on Thursday. The markets tanked (yet again) in early trading and then zigged and zagged in very volatile action the rest of the day.

The DJIA closed essentially unchanged at 10,527. The Nasdaq slipped another 24 points (1%) to close at 2,245, after hitting a new intra-day low of 2,186 earlier in the day. It was the Nasdaq's fourth consecutive losing session, and declining issues lead advancers by a solid 2 to 1 ratio.

After hours, high tech poster child Sun Microsystems shocked The Street by cutting its quarterly earnings estimate in half, to about eight cents a share. Friday may be very cloudy for Sun as well as the rest of the Nasdaq.

The markets remain in a very precarious position, either right at the brink of an historic crash, or a substantial multi-week countertrend rally.   Grizzly

Grizzly's Daily Growl  Wed. 02/21/01  7:00 PM EST
The Nasdaq tried valiantly to rally Wednesday and by midday it was up 35 points. But that was all she wrote for today's rally. The Comp tanked 85 points from there to close the day down 49 points (2.1%) at 2,269, bringing its losses for the past three sessions to 283 points (11%). The Nasdaq is now down 55% from its all-time high last March and is at its lowest levels in nearly two years. 

As we've been saying in our monthly updates, "surprises in bear markets are to the downside," so I guess we shouldn't be too surprised by the fact that the Nasdaq has been unable to muster anything resembling a sustainable rally.

The Nasdaq 100 futures are down 36 points in early evening trading, so a bounce tomorrow is in doubt, at least at the opening. Over in Japan, the Nikkei 225 is trading below 12,900, a level it hasn't seen in 28 months, and it's closing in on levels it hasn't seen since 1986!

The DJIA opened below our cited support of 10,725, made a brief and feeble rally attempt, and then didn't look back. The DJIA got crunched for a 205 point loss (1.9%) to close at 10,526. The coast is now cleared for a 1,000+ point plunge in the weeks ahead, back below last year's low of 9,600.

The fact that the markets continue to slide despite being very oversold portends one of two things: either the markets are about to capitulate in an historic crash, or, a very strong counter-trend rebound will be next, one that will work off the extreme oversold technicals, pessimism, and fear on The Street that periodically cause the Great Bear to pause before the next leg takes hold. We'll know shortly.   Grizzly

Grizzly's Daily Growl  Tues. 02/20/01  7:00 PM EST
The Great Bear rested yesterday and tighten his grip on the Bull's horns today. As we discussed Friday, the Nasdaq's gap-down opening created a nearly symmetrical and clearly bearish "island reversal" formation.

Short-term, the Nasdaq appeared very oversold and it looked like a bounce was due. None materialized. Instead, the Nasdaq is starting to inspire some of that fear and "blood in the streets" that typically mark at least a short-term bottom. The Nasdaq lost another 107 points (4.4%) to close at 2,318. This on top of Friday's 5% drop. The Nasdaq is now about 1,000 points below its 200-day moving average, and is right at Bollinger Band support around 2,385. At least a short-term bounce appears to be at hand.

The DJIA rallied 100 points right out of the gate, only to be firmly rejected by the 10,900 resistance level. From there, it lost 170 points to close at 10,731, just a hair above our critical support of 10,725. Our outlook for the past two weeks or so has been that "a solid break of 10,725 on the downside should confirm that the next leg of the Great Bear is underway in earnest." Tomorrow may be the day.  Grizzly

Grizzly's Daily Growl  Fri. 02/16/01  6:00 PM EST
As the overnight futures had suggested, the markets sank right from the get-go Friday morning. The Nasdaq's gap-down opening has created a nearly symmetrical and clearly bearish "island reversal" formation.

This pattern portends much more selling ahead in the weeks to come. Short-term, the Nasdaq is very oversold, so a strong bounce is likely over at least the next few days.

Today's sell-off accelerated following news of the bombing of Iraq, but once the news settled in that it was not (yet?) the start a major new conflict, the markets heaved a sigh of relief and bounced a bit off the session lows.

The Nasdaq closed the day down 128 points (5%) at 2,425. For a few minutes the DJIA did trade a few ticks below our critical support level of 10,725, but it promptly bounced to close off only 92 points at 10,799. The DJIA retraced just about all of Thursday's gain. We're still looking for a solid break of 10,725 on the downside to confirm that the next leg of the Great Bear is underway in earnest.

The markets are closed Monday for President's Day. (They're in need of a day off anyway.) Have a great three-day weekend.     Grizzly

Grizzly's Daily Growl  Thurs. 02/15/01  6:00 PM EST
In the "Where the Hell Were You Thirteen Months Ago" department, Prudential Securities today downgraded Amazon.com to a "sell" from a "hold." Heeeelllloooo Prudential!?: You rated Amazon as a "strong buy" when it was above 100 in December, 1999. You told us to "hold" it at 40 last July. And NOW, after the stock has plunged 87%, NOW you tell us to sell, at 14?? Talk about a contrary indicator! Now may be an opportune time to take a nibble on Amazon on the long side.

Our outlook for a drop in the Nasdaq Thursday was just plain wrong. Instead, the Nasdaq tacked on 62 points to nearly match Wednesday's 64 point gain. However, the Nasdaq 100 futures are trading 65 points below fair value in early trading tonight, so the Nasdaq is poised to give back all of today's gains right out of the gate on Friday.

Today's 95 point gain in the DJIA was spirited, though it still wasn't enough to recoup all of Wednesday's 107 point drubbing. We're looking for a solid break of 10,725 on the downside to confirm that the next leg of the Great Bear is underway in earnest.     Grizzly

Grizzly's Daily Growl  Wed. 02/14/01  6:00 PM EST
The DJIA extended Tuesday's losses and tanked another 107 points on Wednesday. The DJIA closed near its lows of the day at 10,795, well below the 11,000 ceiling it has been unable to surpass in recent weeks. We're looking for a solid break of 10,725 on the downside to confirm that the next leg of the Great Bear is underway in earnest. It may come tomorrow morning.

The Nasdaq gained 64 points, but that was only just enough to recoup Tuesday's losses. The Nasdaq closed Wednesday at 2,491. As with the DJIA's rally on Monday, today's Nasdaq rally appears to be a classic three-wave counter-trend bounce in an ongoing Bear Market. If so, the Nasdaq should head south on Thursday.

The next leg of the Great Bear should begin accelerating in earnest shortly.    Grizzly

Grizzly's Daily Growl  Tues. 02/13/01  6:00 PM EST
Again, as we said Friday, "... a brief counter-trend rally is likely soon, probably starting Monday." It looks like Monday was all she wrote for that short-term rally, as the markets headed South once again on Tuesday.

In his testimony before the US Senate Tuesday, Sir Alan of Greenspan as usual spoke at length but didn't say much definitive. Traders and pundits seemed a bit surprised that Sir Alan effectively dodged the issues again with his patented "Greenspeak."

The Nasdaq rose 65 points in early trading, only to give it all back and then some by the close. The Nasdaq finished at its low of the day at 2,427, down 62 points (2.5%). The DJIA poked its head above 11,000 again but still it couldn't hold above those lofty levels. The DJIA closed down 43 points at 10,903.

The next leg of the Great Bear should begin accelerating in earnest shortly.    Grizzly

Grizzly's Daily Growl  Mon. 02/12/01  6:00 PM EST
As we said Friday, "... a brief counter-trend rally is likely soon, probably starting Monday."

The DJIA powered ahead 165 points Monday for its first gain in a week. Today's rally in the DJIA looks like a classic three-wave counter-trend bounce in an ongoing Bear Market. If so, the DJIA should head south on Tuesday.

The Nasdaq could manage only a meager 18 point bounce Monday, hardly making a dent in last week's seven percent loss.

Sir Alan of Greenspan will testify before the US Senate Tuesday, so all ears on The Street will once again try to decipher his "Greenspeak" into clues as to when the Fed will again cut interest rates. We've already seen what Fed rate cuts can do: the Nasdaq fell 400 points (14%) following the last cut on January 31st.  Grizzly

Grizzly's Daily Growl Fri. 02/09/01  6:00 PM EST
The Nasdaq tanked another 91 points (3.5%) Friday, closing at 2,470. For the week, the Nasdaq plunged 7 percent and it has erased all of January's counter-trend gains. 

Short-term, the Nasdaq is looking very oversold, and a brief counter-trend rally is likely soon, probably starting Monday. If the Nasdaq can't hold above Friday's lows, then looooookkkkk oooouuuutttt beeeelooooooowwww!

As we had expected (see the Daily Archives), the markets have fallen pretty much non-stop since Sir Alan of Greenspan and his Merry Moneymen (and women) cut the federal funds rate on January 31st. The Nasdaq is down 400 points (14%) since then. Have a great weekend!     Grizzly

Grizzly's Daily Growl Thurs. 02/08/01  6:00 PM EST
Seems as if everyone has forgotten all about Sir Alan of Greenspan and his Merry Moneymen (and women). The markets slumped Thursday as if they had raised interest rates! The DJIA fell for the third straight day, closing down 66 points at 10,880. The 11,000 barrier has proven as formidable a resistance level as 10,450 has been support.

The Nasdaq gave back all of its mid-morning 42 point gain and closed down 45 at 2,562. It appears that wave 5 of (3) in the Nasdaq is underway, and it should carry well below 2,000.   Grizzly

Grizzly's Daily Growl Wed. 02/07/01  6:00 PM EST
Yesterday we said "Wednesday could be ugly." It was ugly, though not as encouraging for us Bears as it might have been. The Nasdaq recovered from a 110 point drubbing at mid-day to close down only 57 points at 2,608. It appears that wave 5 of (3) in the Nasdaq is underway, and it should carry well below 2,000. 

High tech poster child Cisco took it right on the chin, tumbling nearly 5 points (13%) on over 281 million shares, the second highest volume day in Nasdaq history. If a one cent per share shortfall in meeting earnings expectations can cause this much damage and commotion, folks, "we ain't seen nuttin' yet."

Keep an eye on the Nikkei 225 overnight as it has plunged another 325 points (2.4%) in early Thursday trading. The Nikkei is now at a 28-month low, and is approaching levels it hasn't seen since 1986!   Grizzly

Grizzly's Daily Growl Tues. 02/06/01  6:00 PM EST
Ohhhhh noooooo, Ceeeesco! Loookkkkkk ooooouuuuutttt beeeeeeloooooooowwww! The network equipment maker and Wall Street darling disappointed all those anal-ysts who live and die on a penny per share of earnings. 

The Nasdaq pushed ahead by 21 points Tuesday, regaining just a small portion of the 200 points it has lost over the past four trading days. The DJIA poked its head above 11,000 again briefly today before sliding to close down 8 points at 10,951. The 11,000 area is proving to be formidable resistance.

As this "Growl" goes to press early Tuesday evening, the Nasdaq 100 futures are down about 42 points. Wednesday could be ugly. Please see Grizzly's Growling Report for this month's update on where we stand in the bigger picture.   Grizzly

Grizzly's Daily Growl Mon. 02/05/01  6:00 PM EST
Monday was another one of those split decision days. The Nasdaq slipped badly in early trading and was off as much as 65 points before recovering and closing down only 17 points at 2,643.

The DJIA advanced 101 points Monday, recovering most of Friday's 119 point loss.

Please see today's Grizzly's Growling Report for this month's update on where we stand in the bigger picture.    Grizzly

Grizzly's Daily Growl Fri. 02/02/01  6:00 PM EST
Today marked America's annual tribute to that lovable rodent, the groundhog. Punxsutawney Phil indeed saw his shadow this morning, portending six more weeks of cold winter weather. 

The real question facing the markets today was whether Sir Alan of Greenspan saw his shadow. As today's 100+ point drops in the Nasdaq and DJIA suggest, the markets are in for at least six more weeks of the Great Bear. We think a lot more. Check back Monday morning for a full Grizzly's Growling Report.  Have a great weekend!  Grizzly

Grizzly's Daily Growl Thurs. 02/01/01  6:00 PM EST
The Nasdaq muddled along most of the day Thursday. The index edged up 11 points at the close, unable to mount much of a recovery from Wednesday's 66 point, post-Greenspan setback. A last hour rally did pull the DJIA higher by 96 points.

Signs that the economy is already in recession are becoming more evident every day. Here's a sampling of recent economic indicators:

• The National Association of Purchasing Management's index of manufacturing activity fell to 41.2 percent in January, the index's sixth straight monthly decline.

• Business Week magazine is reporting that General Electric plans to cut 75,000 jobs over the next two years, though GE is denying the report, at least for now.

• U.S. gross domestic product grew at its slowest pace in five years during the 4th quarter of 2000.

• Consumer confidence has tumbled to its weakest levels in four years.

Some economists are saying that the recession is already over! We don't buy it for a second, and we don't buy that the bear market is over, either.  Check back Monday morning for a full Grizzly's Growling Report.    Grizzly