Grizzly's Daily Growl Archives

"Grizzly's Daily Growl" Archives - May 2001
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Grizzly's Daily Growl Thurs. 05/31/01 9:00 PM EDT
Today, the markets recovered about a quarter of Wednesday's sharp losses. The Nasdaq surged through mid-afternoon and stopped at 2,140. It then gave back 30 points to close up 26 points (1.2%) at 2,110. The DJIA followed suit, rallying early and then yielding 65 points in the final two hours to close up 39 points (0.4%) to 10,912.

As mentioned yesterday, the Nasdaq had fallen ten percent in the prior five trading days, so a short-term bounce shouldn't surprise us. On the Elliott Wave patterns, today's bounce formed in a 3-wave corrective pattern, strongly suggesting that the one-larger trend remains down, at least for the next week or so. This decline should be a small wave 5 down, completing the drop from last week's 2,330 peak. The 1,900 area (+/-30 points) remains a solid target for this decline.

Please take a moment to give us your thoughts on where you think the Nasdaq is headed. Cast your vote in our new online poll, just up and to the left of this column. Grizzly

Grizzly's Daily Growl Wed. 05/30/01 9:00 PM EDT
Last week's selling accelerated on Wednesday, driving the markets sharply lower. It was SSDDDC (same story, different day, different company), this time for Sun Microsystems. Sun dropped some more hints that the recession is intensifying and corporate earnings will not meet The Street's already lowered estimates. As Jim Stack of InvesTech Research puts it in his analysis of the Chart of the Week, "We still believe the U.S. is in a recession that began late last year... and we still believe it will be recognized by main street economists." We heartily agree.

The Nasdaq sank steadily Wednesday and closed just above the low of the day at 2,084, down 91 points (4.2%). The Nasdaq has now lost 229 points, ten percent, in just the last five trading days. Today's 166 point loss was the DJIA's largest in nearly two months. The 11,000 level offered no support as the DJIA closed at 10,873. The markets have now given back all of the interest rate cut rally that started two weeks ago.

Short-term, the sell-off has pushed the market technicals into oversold status. A bounce at this point shouldn't be a surprise, nor will it alter our recent outlook calling for a test of the 1,900 area on the Nasdaq. (Our previous alternate outlook of one more leg up to complete a diagonal triangle has been invalidated.)

Please take a moment to give us your thoughts on where you think the Nasdaq is headed. Cast your vote in our new online poll, just up and to the left of this column. Grizzly

Grizzly's Daily Growl Tues. 05/29/01 9:00 PM EDT
The Nasdaq continued last week's downtrend with another solid drop on Tuesday. The Nasdaq tumbled 75 points (3.5%) to close at 2,176. Renewed fears of poor earnings for high-tech companies took the blame for today's drop. Same story, different companies, different day.

The DJIA managed to stay in the green most of the day as it closed up 34 points (0.3%) at 11.039.

We'll stick with our recent outlook calling for the Nasdaq to drop to the 1,900 area before mounting any kind of meaningful rally. Our alternate outlook is that the Nasdaq is in the early stages of a diagonal triangle pattern that allows for one more brief rally to the 2,350-2,400 area, starting about now. Elliotticians know that diagonal triangles are ending movements and are almost always followed by very sharp moves in the opposite direction. If the Nasdaq does advance over the next few days, the ensuing decline should be rapid and devastating to the new-found bulls. We'll be on our toes as the pattern plays out.

Please take a moment to give us your thoughts on where you think the Nasdaq is headed. Cast your vote in our new online poll, just up and to the left of this column. Grizzly

Grizzly's Daily Growl Fri. 05/25/01 9:00 PM EDT
The markets continued the weakness of the last three days with another solid drop on Friday. The DJIA found a some support around 11,000 as it closed the day off 117 points (1.0%) at 11,005. The DJIA is now down 350 points over the last four trading days.

The Nasdaq fell 60 points in the first hour of trading, and then bounced around the 2,250 level the rest of the day. The Comp closed down 31 points (1.4%) at 2,251.

We'll stick with our recent outlook:

The Elliott Wave patterns on the Nasdaq are suggesting a drop lasting perhaps a week or so, down to around the 1,900 area, to be followed by one more leg up to complete the entire counter-trend rally from way back on April 4th. The Nasdaq may not hold up for very long.

Our alternate outlook is that the Nasdaq is in the early stages of a diagonal triangle pattern that allows for one more brief rally to the 2,350-2,400 area. Elliotticians know that diagonal triangles are ending movements and are almost always followed by very sharp moves in the opposite direction. If the Nasdaq does hold up over the next few days, the ensuing decline should be rapid and devastating to the new-found bulls. We'll be on our toes as the pattern plays out.

Have a great Memorial Day weekend and please take a few moments to thank those who have given their lives in service to the USA. Next update: Tuesday at 9:00 PM EDT. Grizzly

Grizzly's Daily Growl Thurs. 05/24/01 9:00 PM EDT
The markets saw a only bit of rebound Thursday following the prior day's solid drops. The Nasdaq went nowhere most of the day until a late-day surge yanked it out of the red to close at 2,282, up 39 points (1.7%). The DJIA also rebounded out of the red to close up 17 points (0.2%) at 11,122.

The Nasdaq ended its six-day winning streak Wednesday with a solid drop of 70 points (3%) at 2,243. The Nasdaq last mounted six consecutive advances (actually seven) back on January 28, 2000 to February 8, 2000. We know the market topped just a month later, on March 10th, at 5,132. With 20/20 hindsight, of course we know the Bubble burst on that date, kicking off the Great Bear Market of 2000-200[?].

The Elliott Wave patterns on the Nasdaq are suggesting a drop lasting perhaps a week or so, down to around the 1,900 area, to be followed by one more leg up to complete the entire counter-trend rally from way back on April 4th. The Nasdaq may not hold up for very long, so we'll be on our toes as the pattern plays out.

Has the Fed rescued the economy? Please take a moment to express your opinion: is Fed Chairman Alan Greenspan a Bull Market Hero or a failed Zero? Cast your vote in our online poll, just up and to the left of this column. Poll closes midnight tonight! Grizzly

Grizzly's Daily Growl Wed. 05/23/01 9:00 PM EDT
The DJIA sank steadily all day, unable to muster more than a few brief bounces. The DJIA closed a hair above the low of the day at 11,105, down 152 points (1.4%).

So now with the Nasdaq's winning streak over, will history repeat itself and soon start the next major leg of the Great Bear? The scenario is very plausible. The Elliott Wave patterns on the Nasdaq are suggesting an immediate drop lasting perhaps a week or so, down to around the 1,900 area, to be followed by one more leg up to complete the entire counter-trend rally from way back on April 4th. The Nasdaq may not hold up for the month it did last year, so we'll be on our toes as the pattern plays out over the next few weeks.

Grizzly's Daily Growl Tues. 05/22/01 9:00 PM EDT
The Nasdaq barely managed to extended its winning streak to six days Tuesday with an 8 point gain, closing the day at 2,314. On the other hand, the DJIA was down solidly and closed near the low of the day at 11,257, down 80 points (0.7%).

Market technicals are strongly overbought, yet the short-term Elliott Wave patterns suggest there's likely still more to go on the upside for the Nasdaq. We think the 2,400 area will provide formidable resistance to the Nasdaq's advance, which we firmly believe is an admittedly large though counter-trend rally within the framework of the Great Bear Market of 2000-200[?]. The DJIA appears ready to push higher as it breaks out of the narrow trading range of the last four days.

Grizzly's Daily Growl Mon. 05/21/01 9:00 PM EDT
The markets chopped higher Monday as bullish sentiment continues to dominate The Street. The DJIA gained 36 points (0.3%) to close at 11,338. The Nasdaq surged 107 points (4.8 %) at 2,306.

Market technicals are strongly overbought, yet the short-term Elliott Wave patterns suggest there's likely still more to go on the upside. We think the 2,400 area will provide formidable resistance to the Nasdaq's advance, which we firmly believe is an admittedly large though counter-trend rally within the framework of the Great Bear Market of 2000-200[?].

Grizzly's Daily Growl Fri. 05/18/01 9:00 PM EDT
The markets drifted lower most of Friday until another one of those last half-hour rallies yanked the averages out of the red. The DJIA scored a 53 point (0.5%) advance to close at 11,301. The Nasdaq could only muster a 5 point (0.25%) gain at 2,199.

We think next week will bring weakness as the market technical are strongly overbought and The Street returns its focus to the latest batch of corporate earnings disappointments and the dismal state of the economy.

The Fed has now cut the Fed Funds Rate by 40% since the beginning of the year. As we've said previously:

"The only conclusion one can draw from the Fed's actions is they are very worried about the health of the economy. They must now believe that the economy is much weaker than previously thought. And this is good news for the stock markets?!"

Speaking of Sir Alan, please take a moment to express your opinion: is Fed Chairman Alan Greenspan a Bull Market Hero or a failed Zero? Cast your vote in our online poll, just up and to the left of this column. Have a great weekend! Grizzly

Grizzly's Daily Growl Thurs. 05/17/01 9:00 PM EDT
The markets mustered only a meager follow-through to Wednesday's rally. The DJIA surged to plus 85 points at 10:00 AM EDT and then zigged and zagged lower to close up 33 points (0.3%) at 11,249. The Nasdaq followed suit as it rallied strongly at the open only to give back most of the gains by the close. The Nasdaq gained 27 points (1.2%) at 2,194.

The market technicals have turned to very overbought and upside momentum has waned, so a short-term pullback is likely in progress. The very short-term Elliott Wave pattern on the Nasdaq shows a completed five-wave rally from Wednesday morning's low to today's high, strongly suggesting at least a temporary peak is in place. The Nasdaq should proceed to test 2,120 or so. The 2,400 area, about 10% higher from today's close, should provide formidable resistance to any extension of the rally that may develop here.

The Fed has now cut the Fed Funds Rate by 40% since the beginning of the year. As we've said following several of the five rate cuts:

"The only conclusion one can draw from the Fed's actions is they are very worried about the health of the economy. They must now believe that the economy is much weaker than previously thought. And this is good news for the stock markets?!"

Grizzly's Daily Growl Wed. 05/16/01 9:00 PM EDT
"Holy Bear Poop, Batman!" The bulls proved our short-term outlook to be dead wrong. [We're not clairvoyant.] In a delayed reaction to yesterday's universally expected interest rate cut by Sir Alan of Greenspan & CO., the markets stormed ahead Wednesday. The DJIA surged 343 points (3.1%) to close at 11,216 and the Nasdaq advanced 81 points (3.9%) at 2,166.

As discussed in this month's Grizzly Growlings Report, "these are the times that try Bears souls:"

"This is an albeit very large counter-trend rally within the framework of the Nasdaq Great Bear Market of 2000-200[?]. The rally will likely have a ways more to go in terms of both price and time, so be prepared for the return of wild bullishness and equally wild claims that the next Bull Market is underway. We say Bull!"

The Elliott Wave patterns suggest there is still more to go on the upside to complete the counter-trend rally in the Nasdaq. The 2,400 area, about 10% higher from today's close, should provide formidable resistance to the advance.

The Fed has now cut the Fed Funds Rate by 40% since the beginning of the year. As we've said following several of the five rate cuts:

"The only conclusion one can draw from the Fed's actions is they are very worried about the health of the economy. They must now believe that the economy is much weaker than previously thought. And this is good news for the stock markets?!"

Grizzly's Daily Growl Tues. 05/15/01 6:00 PM EDT
As we anticipated yesterday:

" The markets likely will bounce around quite a bit after the announcement, but then we think the sellers will take charge. The markets should head south for the rest of the week."

Well, Sir Alan of Greenspan and Company delivered a full loaf's worth today, as they met market expectations with a 50 basis point reduction in the Federal Funds rate.

The DJIA opened about 25 points lower and stayed there until about 1:30 PM when it broke to the downside and was down 60 points just before the Fed announcement at 2:15 PM. From there, the DJIA surged to plus 50 points, only to give it all back. The DJIA closed at just about where it was 30 minutes before the Fed announcement, down 4 points at 10,873.

The Nasdaq opened a bit higher and then rallied to plus 40 points following the Fed news. The last-hour sell-off brought it down from the high of the day to close near the low of the day, up about 4 points at 2,086.

So, it looks like today's focus on the Fed turned out to be another case of "much ado about nothing." We think the markets will head south for the rest of the week, as The Street returns its focus to the latest batch of corporate earnings disappointments and the dismal state of the economy.

Grizzly's Daily Growl Mon. 05/14/01 9:00 PM EDT
Things were indeed quiet on The Street Monday in anticipation of Sir Alan of Greenspan and Co.'s next move. Nevertheless, the Nasdaq turned south right from the gate and by 2:45 PM EDT it was down 50 points at 2,060. Another one of those last-hour rallies pulled the Nasdaq off the low of the day to close at 2,082, down 26 points (1.2%). The last-hour rally pulled the DJIA into positive territory to close at 10,877, up 56 points (0.5%).

So what will Sir Alan decree on Tuesday? Our guess is half a loaf, a 25 basis point cut, delivering an unwelcome disappointment. The markets likely will bounce around quite a bit after the announcement, but then we think the sellers will take charge. The markets should head south for the rest of the week.

Grizzly's Daily Growl Fri. 05/11/01 9:00 PM EDT
The DJIA led the way today, tumbling 150 points on the 10:00 AM EDT news that consumer confidence rose in May to a higher than expected level. From there, the bounced around on both sides of 10,800. A last half-hour rally pulled the DJIA up from the lows of the day to close at 10,821, down 89 points (0.8%).

The Nasdaq followed the DJIA's pattern today, sinking early, then meandering until the late rally pulled it off the lows to close the day down 21 points (1%) at 2,107.

In Elliott Wave terms, the Nasdaq extended yesterday's small degree five-wave decline, indicating that the short-term trend has turned lower. With The Street focusing again on Sir Alan of Greenspan's next performance on Tuesday, conventional wisdom would have it that Monday should be quiet and the markets should rally on the widely anticipated 50 basis point rate reduction. If our outlook is correct, the markets will be disappointed in whatever Sir Alan has to say, and the Nasdaq will head south. A break below 2.070 or so should lead to the 1,850-1,900 area.

Grizzly's Daily Growl Thurs. 05/10/01 9:00 PM EDT
Yesterday we said " There may be a few more days of bouncing around in a fairly narrow range to complete the pattern, which should be followed by a sharp and swift move. The problem is, at this point it looks as if the breakout could go either way. We'll just have to stay on our toes over the next few days."

We got more bouncing around in the DJIA today, but the Nasdaq registered a steady down day. Fueled by the overnight futures, which were "lock-limit" up, the Nasdaq surged 40 points higher at the opening. It was all down hill from there, with only a brief pause at 2,150. The Nasdaq closed at the low of the day at 2,129, down 28 points (1.3%).

The DJIA held in positive territory all day, but still closed near the day's low at 10,910, up 43 points (0.4%).

In Elliott Wave terms, the Nasdaq declined in a clear five-wave pattern today, strongly suggesting the termination of the consolidation period. The jury is still out though, as to the direction of the breakout. Either the Nasdaq is ready to drop back to at least 2,000, or it's about to launch another rally towards 2,350-2,400. Again, we'll just have to stay on our toes over the next few days.

With next week's Fed meeting, please take a moment to express your opinion: is Fed Chairman Alan Greenspan a Bull Market Hero or a failed Zero? Cast your vote in our online poll, just up and to the left of this column. Grizzly

Grizzly's Daily Growl Wed. 05/09/01 9:00 PM EDT
Yesterday's news about Ceeeessssko System's earnings pulled the Nasdaq lower right out of the gate this morning. By 10:30 AM EDT the Nasdaq was down 56 points. A rally from there brought it back to down only 10 points, high of the day, at 1:00 PM. Another round of selling sank the Nasdaq as it closed down 42 points (1.9%) at 2,157.

The DJIA followed the Nasdaq's lead today, thought it actually poked its head back into positive territory during the lunch hour. From there it edged lower to end the day at 10,687, down 16 points (0.1%).

The markets have chopped up and down to a net nowhere over the past eight trading days. This consolidation reads as an Elliott 4th wave. There may be a few more days of bouncing around in a fairly narrow range to complete the pattern, which should be followed by a sharp and swift move. The problem is, at this point it looks as if the breakout could go either way. We'll just have to stay on our toes over the next few days.

Grizzly's Daily Growl Tues. 05/08/01 9:00 PM EDT
The DJIA opened lower, sinking on news that worker productivity actually decreased in the first quarter of 2001, the first drop in six years. (Please check this month's edition of Grizzly's Growlings Report. for additional discussion on the state of the economy.) By 10:30 AM EDT, the DJIA was off 115 points. From there, the blue chips chopped their was back to close down 52 points (0.5%) at 10,884.

In contrast, the Nasdaq opened solidly higher, boosted by the perverse "good news" that Burst-Bubble poster-child Cisco Systems reported that it wasn't a total basket-case. The Nasdaq recovered a bit more than yesterday's loss to close at 2,199, up 25 points (1.1%). Volume perked up a bit from yesterday, with over 1.7 billions shares trading on the Nasdaq and nearly one billion on the NYSE.

Ceeeeesssko "only" reported that, excluding one-time charges (as if they don't really count), it earned 3 cents per share in their fiscal quarter ended April 28. That was a whopping one cent higher than The Street anal-ysts' guesstimate. Whoopppiieee! Reading between the not so subtle lines of the "good news":

Cisco's net loss for the third quarter, including the one-time charges, was $2.69 billion.
The one-time charges included a write off "only" $2.2 billion for "excess inventories," instead of their prior estimate of $2.5 billion.
Twice during the quarter, the company had lowered its earnings expectations, so "beating the street" by a penny was not exactly a significant accomplishment.
Revenue was down 30 percent from the most recent quarter.

Stay tuned for much more "good" news from other companies in the weeks and months to come.

Grizzly's Daily Growl Mon. 05/07/01 9:00 PM EDT
Monday offered the quietest, least volatile trading in recent memory. The DJIA traded within a very narrow 100-point range all day, between about 10,900 and 11,000. The DJIA surged 45 points shortly after the opening and then bounced around to close near the middle of the day's range at 10,935, down 16 points (0.1%). Only 887 million shares traded on the NYSE.

Things were just about as quiet, though a bit weaker, on the Nasdaq today. Trading held within a 50-point range on 1.2 billion shares. The Nasdaq closed down 18 points (0.82%) at 2,174.

Please check today's edition of Grizzly's Growlings Report.

Is Fed Chairman Alan Greenspan a Bull Market Hero or a failed Zero? Please take a moment to express your opinion. Cast your vote in our online poll, just up and to the left of this column. Grizzly

Grizzly's Daily Growl Thurs. 05/03/01 9:00 PM EDT
The DJIA repeated Wednesday's opening today, sinking sharply at the open. By 10:30 AM EDT the DJIA was off 150 points. From there, the DJIA mounted another choppy and sluggish rally to close near the high of the day at 10,797, down 80 points (0.75%).

The Nasdaq was hit hard today, down 90 points at 3:00 PM. A weak last-hour rally brought the Nasdaq off the session low to close down 74 points (3.4%) at 2,146.

Wednesday's highs likely marked a short-term top in the markets. A break of 10,700 on the DJIA should lead to a drop back towards the 10,300-10,400 level in the next week or so. 2,000 on the Nasdaq should be tested in this time frame. Where the markets go from there is not clear at the moment. There may be one more up leg to mark the termination of the counter-trend rally from the April lows, or the Great Bear Market of 2000-200[?] may belly right up to the table for his next feeding.

Is Fed Chairman Alan Greenspan a Bull Market Hero or a failed Zero? Please take a moment to express your opinion. Cast your vote in our new online poll, just up and to the left of this column. Grizzly

Grizzly's Daily Growl Wed. 05/02/01 9:00 PM EDT
The DJIA sank about a hundred points right out of the gate today. From there, the DJIA mounted a choppy rebound and made it back into the green at 3:00 pm EDT. For a change, the sellers took charge in the last hour, driving the DJIA down a net 21 points (0.2%) on the day to close at 10,877.

As it has for the last two weeks, the Nasdaq fared better than the DJIA today. The Nasdaq bounced around all day, all in positive territory, closing up 52 points (2.4%) at 2,221. The Nasdaq also gained 52 points on Tuesday.

We're sticking with out overall market outlook from last Friday:

The Elliott Wave patterns are suggesting that the Great Bear is not quite ready to return to the table with a full appetite. From the April lows, the rally has developed in a five-wave pattern, indicating a short-term sell-off lasting perhaps a week or so is now at hand. This drop should then yield to one more up leg to mark the termination of the counter-trend rally.

One thing is certain: The Street is convinced that the bottom is in and it's back to the bull market as usual. As contrarians, we think the table is merely being set for the next feeding of the Great Bear Market of 2000-200[?].

Grizzly's Daily Growl Tues. 05/01/01 9:00 PM EDT
Today is May Day, "celebrated" around the world as "the International Working Class Holiday." You've no doubt seen television footage of workers around the world rioting and protesting against low wages, unemployment and "the evils of capitalism." Yeah right.

The bigger question is, is it "mayday" for us bears? We say, decidedly, NOT!

The DJIA recovered just about all of Monday's intraday losses today as it rallied 163 point (1.5%) to close at 10,898. The DJIA has bumped into the 10,900 ceiling twice in the last two days. Today's rally had the look and feel of a blow-off as it completed a classic Elliott Wave five-wave pattern. Indeed, the entire advance from 9,007 low back in March appears to be a complete five wave pattern. The next move should be a drop back to at least the 10,400 area.

The Nasdaq surged 52 points (2.54%) to close at 2,168. The Nasdaq should go along for the ride down back below 2,000.

We're sticking with out overall market outlook from last Friday:

The Elliott Wave patterns are suggesting that the Great Bear is not quite ready to return to the table with a full appetite. From the April lows, the rally has developed in a five-wave pattern, indicating a short-term sell-off lasting perhaps a week or so is now at hand. This drop should then yield to one more up leg to mark the termination of the counter-trend rally.

One thing is certain: The Street is convinced that the bottom is in and it's back to the bull market as usual. As contrarians, we think the table is merely being set for the next feeding of the Great Bear Market of 2000-200[?].

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