SUMMARY - "PIG":
The Contrarian's View is published 11 times per year on a mostly-irregular schedule, and the views expressed are those of the author and editor, Nick Chase. Because nobody can predict the future, results of past suggestions or recommendations are no guarantee of future results. Material in this publication may be freely quoted provided proper attribution is given to its source. Subscription rate: Free on the Internet through the World-Wide Web service at Assumption College. Using your favorite Web-browsing program, Open URL http://nick.assumption.edu. Mailed paper subscriptions, one year for $39 to The Contrarian's View, 132 Moreland Street, Worcester, Massachusetts 01609. There is a limit of 50 paid subscribers at one time; please check for availability before sending any money. Sorry, Visa and Mastercard are not available. Overseas subscription rate, U.S. $54. Unsolicited material sent to us by UPS or by courier other than the postal service is refused and returned to sender! Phone: (508) 757-2881
But suppose I'm wrong? Suppose the Fed is able to buck history, and actually modify mob psychology to the extent the air can be let out of the bubble gradually? Doesn't that validate the "buy-and-hold-forever" strategy?
Gradually deflating the bubble means that, over time, stocks must return to historical norms of value. For the years 1925-1987, the norm was for stocks (S&P 500) to trade around 1.9 times book value, and 24 to 27 times dividends.Taking the "hypotenuse" of the two (maintaining a linear relationship) to arrive at an index value of 25, then we can look at past and current periods of overvaluation:
Average (1925-1990) 25 1929, before Crash 33 (32% overvalued) 1987, before Crash 38 (50%) 1991 34 (37%) 1992 35 (41%) 1993 35 (41%) 1994 (invisible bear!) 38 (53%) 1995 (mania begins) 45 (79%) 1996 50 (101%) 1997 63 (153%) 1998 76 (205%) 1999 88 (252%) August 2000 94 (274%)Migod, sometimes one doesn't really appreciate the magnitude of the bubble until the numbers are laid out, as I've done here - because the bubble has been force-fed by the Federal Reserve to continue expanding for so many years; since 1992, really. (My decision to leave stocks behind in 1993 for the relative safety of bonds and/or money-markets may make me a terrible market-timer, but it isn't at all unreasonable when you consider that, at my departure, stocks were historically more overvalued than before the 1929 Crash, and almost as overvalued as before the 1987 Crash. As I've said before, I don't do bubbles.)
Yeah, I know, companies aren't paying out as much of earnings in dividends as they used to, because of the tax bite; investors prefer to "compound" their earnings tax-free within the company. Well, the tax bite rate is about as low as it's been since the 1920s.... I can recall marginal tax rates on ordinary income of 60% to 90% in the 1960s and 1970s, when dividend payout ratios were higher. My guess is that corporate dividend policy reflects investor preference.... owners of stock don't care (particularly since, at today's prices, yields are minuscule.... why bother?).... so companies keep the cash. When stocks no longer deliver outsized capital gains, I expect dividends will again become popular.... I'm not yet ready to consign this particular bit of history to the dustbin.
Anyway, let's assume that history is not bunk, and the Federal Reserve realizes its wildest dreams.... stocks mark time while the economy catches up. Let's assume an optimistic 4% real growth of the economy (which is proportionately reflected in rising book values and dividends) ad infinitum.... at that rate, the "index" will again be at 25 in, oh, about 34 years. Let's see.... no recessions or depressions for a third of a century, during which a "buy-and-hold" of money-markets or bonds will handily outperform a buy-and-hold of the stocks in the S&P average. Good luck, Alan.
A more realistic scenario is probably what the Federal Reserve is actually trying to do: Slowly bring stocks back to earth without seriously impacting the current growth rate of the economy. Let's say that over the next five years the Fed manages a controlled deflation of stocks to 1994 levels of value, while the economy grows by 22%. That would bring the S&P 500 average down to about 700, and the Dow to about 5280. I think that, by anybody's definition, this would be a bear market. And stocks would still be historically overpriced!
My most optimistic scenario for the Fed's success is similar to what happened in Japan in the 1990s.... a stagnant economy for a decade, while the market retrenches, and dividends return to favor. That would return us to the index value of 25, or about 2900 for the Dow, about 380 for the S&P 500.... a killer (though presumably "controlled") bear market.
Now all of these scenarios presume that the Fed wins, and gets its way. What might happen if the Fed loses?
Well, one possibility is that its successful rescues when stocks swoon make people so overconfident that the bubble is reignited, until everybody believes in the "new economy" and the politicians are pressured to allow people to throw every last dollar, including Social Security taxes, at stocks. The Dow sees no limit.... 20,000, 50,000, 100,000.... until something finally snaps that's beyond the Fed's ability to rescue, stocks and the dollar implode, and a depression (and/or hyperinflation) descends upon us.
Another possibility is that the descent becomes uncontrolled; once people realize that the Federal Reserve is not going to guarantee stable or rising stock prices, they panic and stocks crash.
A variation is that some "external" event (most likely, a derivatives failure or a dollar debacle) strikes and the Fed can't move quickly enough to stem the damage, so people panic.
On a more positive note, the Fed may succeed in keeping the popular stocks "channeled" so they rise in tandem with the real growth of the economy plus inflation, 6% to 7% per year. No more double-digit gains; you might as well be in bonds. The free stock market will have died.
So, with the Fed trying to "win", the only way you are likely to win big (by riding a
rebirth of the bubble) is if they lose in their efforts to deflate. I wouldn't bet on this
happening in a post-election year (2001), traditionally a time when a new president is
willing to take his lumps, economically speaking. The real risk, I think, is that the Fed will
lose control of its deflation efforts on the downside, and tip us into a bad recession or
depression.
Increasingly, it is apparent that Greenspan has both lost touch and drifted away from serious economic analysis. And the greater his detachment, the more he seems impelled to adopt "New Era" doctrine. After all, only within his nebulous "New Era," can he rationalize the highest prices and most speculative stock market in history, a virtually nationwide real estate bubble, $400 billion current account deficits, soaring consumer and business debt levels, and a reckless financial sector that has been expanding its borrowings by more than $1 trillion annually, while accumulating upwards of $100 trillion of derivative positions. Of late sounding the true "New Paradigmer," Greenspan is digging in his heels and now espouses the infamous notion "this time it's different." Not only has he developed into an enthusiast of the New Economy, he, amazingly, champions "New Era Finance" as well. Such leaps of faith are grossly inappropriate for a central banker, let alone the Chairman of the US Federal Reserve. - Doug Noland
Every major index has topped out. The dollar is not only the most recent but also the most important. A high dollar is what supports the whole bubble. Imagine the US economy as a dot.com stock. It loses money every day - about a billion dollars of net current account losses. But foreign investors keep buying its stocks and bonds. So, the money is still coming in. A rising dollar means that more money is coming in than is needed to cover the losses. But someday soon - as I have been saying for long enough to prove that my timing is bad - investors will tire buying U.S. paper...the dollar will fall...and the bubble will be over. - Bill Bonner
The economic maladjustments due to many years of monetary manipulations by the Federal Reserve System are the prime source and mover of the inevitable readjustment. Once the market structure no longer reflects the unhampered choices of all participants, the readjustment is unavoidable. In the end, the laws of the market always prevail over the edicts of political controllers and regulators. They even reign over the wishes of a few central bankers. Surely, government officials and central bankers have the power to lessen or aggravate the stresses of readjustment as they have the power to interfere with the economic lives of their nationals. They may reduce their burdens of government and allow the readjustment to proceed quickly and efficiently. Unfortunately, they tend to make matters worse and prolong the readjustment with ever more political intervention such as monetary expansion and deficit spending. The Japanese government managed to turn a readjustment that began in 1990 into a decade of deep depression the end of which has not yet come in sight. This example and many others make us fearful that the U.S. Government will turn the coming readjustment into a long and painful recession. Political intervention is ill designed for soft landings. - Hans F. Sennholz
....on July 26, 2000, JDS Uniphase.... [traded] about $27.25 billion, equivalent to all the money spent on goods and services in the U.S. economy for that same day. And some people still cannot admit that we are in a mania?! Stocks have become - by far - the most important business in America. The industry is geared to keeping share prices flowing in the "right" direction and publicly-owned corporations are aiding in the insanity. Proof of the madness is visible in how Employee Stock Option Plans have affected the total market capitalization of certain companies, principally high-tech. As market capitalization expands, the vast amounts invested in S&P index funds are obliged to buy additional shares in those companies. This tends to increase the price of the shares, further attracting momentum players and employees, who are then even happier to take wages in shares rather than cash. The resulting tax benefits increase corporate earnings and make the shares more attractive to fundamental types, driving prices up still further. Subsequently,as share prices rise, market capitalization increases and the cycle begins anew. This is a perfect description of a stock market pyramid and it has been solidly in place for the last five years,aiding and abetting the mania. It cannot continue indefinitely. As all pyramids must, these must eventually fail. - Alan Newman
On a humorous (or maybe frightening?) note, for the little time I was listening to bubblevision today, no less than three 12-year-old kids called in to ask questions about tech stocks.... That's a new record for the number of adolescents calling into the devil channel on one day as far as I know. As those famous stories of shoeshine boys and elevator operators have been recounted as respectively tipping off Kennedy and Ford in 1929 that something nasty was coming for stocks, so too today's elementary school traders may be a story that somebody tells his grandchildren in the years to come. - Lance Lewis
Take.... the funds I had to choose from recently [in my 401(k)]. All three mid-risk-level funds include General Electric, Cisco, Texas Instruments and Microsoft in their top 10 holdings. Two of the three also hold American Express in the top 10. That's not "diversity", even though they are supposed to be different kinds of funds. In addition, two of the three were around 40% invested in technology stocks. Why would a "growth and income" fund be loaded up with the same stocks a pure growth fund holds? Income funds should be lower risk than growth funds. In contrast, the "value" fund only gave 20% to technology, hardly a conservative allocation given the current tech mania.... I have a proposal. Apologies to those who dislike regulation, but innocents are getting skinned. Let's kick the SEC off the job and let the FDA take charge of labeling mutual funds. You couldn't get away with this kind of stuff at the grocery store, no sir. If it's not 100% dairy except for a smattering of herbs or nuts and such, it ain't cheese. And if it isn't aged in a limestone cave in France, it ain't Roquefort cheese. Add a bunch of whey (which is a milk product) and you have to call the stuff cheese product. You can't fool around when you sell cheese. But these days, anything passes for value in the world of mutual fund investing.... I don't know what will finally end the current bull market for certain. But I can tell you what will end people's blind trust: being cheated. - Lynn Carpenter
I live in Silicon Valley. The land of fast fortunes and fast busts. No doubt the stock option frenzy has helped fuel the boom-town atmosphere, but readers outside of California (or the USA) would not believe the prices of housing. The average home in San Jose (the largest city in the region) runs for well over $400,000. The average apartment was recently reported at $1,400 a month. Excluding the insane housing prices, just about everything else has shot up as well. I'm not just talking about gasoline but things like newspaper subscriptions, airport parking fees ($15 a day!), movie tickets ($9), utilities, cable, etc., etc. The only thing that I've noticed that has gone down in price is the cost of renting a video (25 cents cheaper...wow). Food prices have gone up a lot in just the past year or two. I was recently shocked to pay $2 for three small tomatoes and the same price for three large apples. Worst of all is the sharp increase in pure crab meat which I use for my world famous crab cakes. For the past several years the price remained at $19.99 a pound before recently shooting up to $26.99 a pound (not a seasonal increase). I will admit that electronic devices of all types have come down in price dramatically over the past few years. I recently purchased a CD-RW for my PC for just $150. In fifteen minutes, I can back up 600 megabytes of data and of course use the CD on any system with a regular CD reader. It wasn't that long ago that such a device ran for well over $1,000. Heck, it wasn't that long ago that such a device wasn't even available to the average joe. However, I only make occasional purchases of upgrades for my computer while other bills are paid on a monthly basis. Now, in other areas of the United States folks might have different experiences, but I doubt it. - Marc Sexton
A growing number of publishers in Canada say that Chapters, Inc., Canada's largest electronic book retailer, is paying them late and returning books at an alarmingly high rate. At least some of them are putting the company on "credit hold" refusing to ship books to the retailer until it pays its debts. - Marshall Auerback
The trouble at IBM.... is that the company has been so keen to boost 'shareholder value' that they have destroyed the business. Instead of investing in new plant and equipment, Big Blue bought back its own shares - at record prices - cut costs, and massaged the numbers. These practices make the shares look good in the short run. But in the long run they are a disaster. - Bill Bonner
The music industry has historically been a high-margin industry, in that it had unique control of music's distribution channels. Companies have paid hundreds of millions of dollars for companies such as Thorn EMI, Virgin, etc. on the grounds that they had valuable libraries of copyrighted musical material, not subject to any kind of competitive threat. The value of these musical libraries, and the corresponding power in terms of distribution and access has enabled the music industry to charge absurdly high prices for CDs and records, relative to their low cost of production.... There is clear price resistance to paying large sums for any content that currently features on the Internet.... if that's the case, you can kiss good-bye the notion of paying $14 (or even more in the United Kingdom) for a single CD featuring just one artist. What happens to the industry's profits at that point? All this destruction of profit margins because of an industry, the Internet, once celebrated by the stock market as the next great road to riches on the road to a glorious, globalised free market future is now being seen for what it truly is: a destroyer of capitalist profits. Marx, Lenin, Stalin, and Mao can all rest a little bit easier in their graves tonight. - Marshall Auerback
Back in June 1987, philanthropist George Weiss made a promise to 112 sixth graders -- all minority and poor -- at Belmont Elementary School in West Philadelphia. The program, "Say Yes to Education," would underwrite the college educations of those kids with only one provision -- they must get their diplomas by the summer of 2000. The clock has expired on this little experiment. And the tally should serve as a wake-up call to all those who believe money is the answer to America's educational crisis. Of the 112 students offered this dream 13 years ago: 15 received bachelor's degrees; seven received two-year degrees; 10 received trade-school certificates; 40 dropped out before finishing high school; six died, including one last month in a gunfight; 35 were adjudicated as delinquent; 20 were incarcerated as adults; of the 45 girls in the group, 26 became mothers before age 18. This dismal record is actually being praised in some quarters. But think about it. These kids were offered a free ride through the college of their choice. The offer was made while they were still young enough to seize the opportunity. Yet, precious few took advantage. Far more kids chose crime than education. - Joseph Farah
The first truth about leftist missionaries, about believing progressives, is that they are
liars.... by necessity, often without even realizing that they are.... Why, for example, if you
were one of them, would you tell the truth? If you were serious about your role in
humanity's vanguard, if you had the knowledge (which others did not) that you were
certain would lead them to a better world, why would you tell them a truth that they could
not "understand" and that would hold them back? ....If everybody could see the promised
horizon and knew the path to reach it, the future would already have happened and there
would be no need for the vanguard of the saints. That is both the ethical core and psychological heart of what it means to be a part of the left. That is where the gratification comes
from. To see yourself as a social redeemer. To feel anointed. In other words: To be
progressive is itself the most satisfying narcissism. That is why it is of little concern to
them that their socialist schemes have run aground, burying millions of human beings in
their wake. That is why they don't care that their panaceas have caused more human
suffering than all the injustices they have ever challenged. That is why they never learn
from their "mistakes." - David Horowitz
It's entirely possible we may see new highs in those averages, particularly in the S&P 500, possibly in the Dow, improbably in the NASDAQ. But.... this is still a bear market for most stocks, which means those new highs will be achieved by even more money being concentrated in the few favored big-cap stocks that so heavily influence the averages. (After all, this is where the Fed's rescue efforts are concentrated. Why own an "ordinary" stock which will go down in the bear, when you can own a favored, "too big to fail" big-cap stock whose price the Fed will [in theory] keep propped up during any market upset? Moral hazard, anyone?)
However, even if the bubble remains puffed up for awhile longer, I don't expect the craziness of last spring to return, because the Fed is "officially" (and in reality) using interest rates and reducing the growth rate of the money supply to put downward pressure on stock prices. It just doesn't pay to "fight the Fed" for any length of time (as long as they can retain the desired control), though in the short-term bubble emotions can erupt.
The dot-com thingies have had it.... any return of the bubble is likely to be concentrated in new public offerings of stock (this segment of the market is heating up again) and in the larger, supposedly more-established technology stocks which supply Internet hardware and software (rather than trying to market goods and services over the Internet), in addition to the usual big-cap suspects whose prices will be supported in any manipulation of the averages.
Though the economy is currently rolling along at a good clip in the longest expansion of the 20th century, leading indicators point to a recession likely arriving in the second half of 2001. Since the stock market typically leads the economy by six to nine months, this matches the political cycle and tells us that stocks will seriously head south early in 2001.
But you must remember, because we are in a bubble, systemic risk remains high; an "accident" could appear at any time to trigger a crash and another panic easing attempt by the Federal Reserve, as happened in 1997. Should the Fed again succeed in rescuing the financial system and the stock market (which is, I think, more likely than not), then the bubble will return with a vengeance; but should it fail or elect not to effect a rescue, then this crash will be so phenomenal as to make 1929 appear insignificant.
So where does that leave us? With the majority of stocks in a bear market, as they have been for more than two years, while the favored few ride the crest of the bubble and keep the averages on an even keel, as the Federal Reserve exerts gentle pressure to bring the big-cap stocks and the averages slowly back to earth, and as long as things don't get out of hand, in which case the Fed's reflation efforts will yield an even bigger bubble (success?) or a monstrous crash (failure).
For several years now I've held the opinion that stocks are guaranteed to crash.... 100% odds.... but I also see it likely the crash will unfold in one of two ways. The first is similar to 1929; either a rescue effort fails, or just for no apparent reason at all panic suddenly appears, and stock gap downward with the markets more closed than open. The second is similar to the behavior of the blue chips in May 1970; the Fed succeeds for awhile, and we get a grinding bear market with the crash coming near the end, more a crash of despair than of fright.
But when? This means guessing when the Fed will lose its clout, at which I have not done well in the past nor am I likely to in the future, which is why I've stopped trying. But that isn't the point. The point is, stocks have deviated far from historic levels of value in a government-induced mass public feeding frenzy to acquire them, and we know that some day it will end badly, as it always has in the past. In the meantime, life is good; the economy is healthy (except for debt bloat); people are working and prosperous; so relax and enjoy and use the time to prepare for the ugly times we know will inevitably follow, even if our crystal balls won't reveal how ugly.
Every now and then somebody tweaks me about their making 15% per year or more per
year (paper profits) in the market, as opposed to my much more conservative 5% to 8%
per year (near-cash) in money-markets, guaranteed contracts and bonds.I have no problem
with that, I tell them, if you manage to keep it.... more power to you. And after stocks
crash, and their mutual funds go the way of the investment trusts of the 1930s, I will ask
them: Tell me, why was it that back in 2000 you wouldn't pay $75,000 for a $22,000 car,
but you would pay $75,000 for shares of a blue-chip-tech stock whose historical trend
indicated a fair value of $22,000?
Original cost (adjusted): $ 4,998.21
Present value: $ 3,697.83
Increase: $-1,300.38 [-26.02%]
The performance of this portfolio and its predecessors ("Hedger's Delight", "Present and Future Income", "Crapshooter's Folly") from January 1987 to the present is -16.11%, for a compound annual rate of return of -1.26%. COMMENT on "Phoenix": There is no change from the June issue.
B. "Professors' Investment Group (PIG)" - investment club portfolio.
SUMMARY - "PIG":
Original cost: $ 9,024.00
Present value: $15,766.18
Increase: $ 6,742.18 [+74.71%]
COMMENT on "PIG": The PIGs' Web page is at
http://www.assumption.edu/HTML/Faculty/Kantar/WPigs.html
C. Roth rollover IRA - real portfolio, includes commissions:
SUMMARY - IRA:
Original (1983-86) cost: $ 8,326.19
Present value: $ 9,727.65
Increase: $ 1,401.46 [+16.83%]
The performance of this portfolio (including its predecessors)
from January 1, 1987 to the present is -11.30%, for a compound
annual rate of return of -0.86%.
D. CREF Pension plan; I switch between indexed stock/bond/money funds:
Date Sold Bought
13Mar1992 stock @ 56.65 MM @ 13.41
29Apr1992 MM @ 13.48 bond @ 31.19
19Jun1992 bond @ 32.14 MM @ 13.55
29Jun1992 MM @ 13.57 stock @ 56.74
24Jul1992 stock @ 56.76 MM @ 13.61
29Oct1992 MM @ 13.72 stock @ 58.61
23Dec1992 stock @ 61.48 MM @ 13.78
16Jan1995 MM @ 14.83 equity-index @ 26.44
20Jan1995 eq-index @ 26.19 MM @ 14.84
30Oct1997 MM@ 17.24 bond@47.56 (27.17%)
30Oct1997 MM@ 17.24 i-i bond@26.12 (27.17%)
11Feb1998 bond@ 48.84 MM@17.52 (27.17%)
11Feb1998 I-I bond@ 26.23 MM@17.52(27.17%)
16Jun1998 MM@ 17.84 TIAA Traditional (45.87%)
23Sep1999 MM@18.99 I-I bond@27.56 (53.32%)
17-18May2000 rate adjustment to 7.25% in SRA
12-13Jul2000 rate adjustment to 7.5% in SRA
Values, 1Sep2000: stock, 216.14; MM, 20.06; bond, 55.16; inflation-indexed bond, 29.93; TIAA current yield in SRA, 7.5%
Gain, 1988: 18.91%; 1989: 14.48%; 1990: 8.28%; 1991: 27.93%; 1992: 10.20%; 1993: 3.08%; 1994: 4.07%; 1995: 4.80%; 1996: 5.28%; 1997: 5.38%; 1998: 5.72%; 1999: 5.12%
Gain, January 1 through March 31, 2000: 3.029% (12.68% annual rate of return)
Total gain since January 1, 1988 (12.25 years): 196.77%
Compound annual rate of return: 9.29% (My long-term target: in excess of 15%)
Gain shown excludes the impact of additional monthly cash contributions.
Buying CREF stock on January 1, 1988 and holding it gained
556.04%, for a compound annual rate of return of 16.60%.
COMMENT on NYSE "Timer's Trend":
Currently we're on a solid BUY signal generated
August 4, after some whipsawing in June and July. Though I don't expect any "crashettes"
this fall, should one occur late September to mid-October is the most likely "window" for
it. Check the "computer warmline" if it looks like we might heading toward one.
____________________________ NYSE TIMER'S TREND _______________________________
Mon 20 Mar 00 . & . |10680.24 |-. *
Tue 21 Mar 00 . I #. |10907.34 |+. *
Wed 22 Mar 00 . | #. |10866.70 |+. *
Thu 23 Mar 00 . | .# |11119.86 |+. *
Fri 24 Mar 00 . | #. |11112.72 | + *
Mon 27 Mar 00 . |# . |11025.85 | + *
Tue 28 Mar 00 . #I . |10936.11 |+. *
Wed 29 Mar 00 . # . |11018.72 |+. *
Thu 30 Mar 00 . |# . |10980.25 + . *
Fri 31 Mar 00 . | #. |10921.92 + . *
Mon 3 Apr 00 . | #. |11221.93 +~.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Tue 4 Apr 00 .# I . |11164.84 + . *
Wed 5 Apr 00 .# | . |11033.92 + . *
Thu 6 Apr 00 . | # |11114.27 + . *
Fri 7 Apr 00 . |# . |11111.48 + . *
Mon 10 Apr 00 . |# . |11186.56 + . *
Tue 11 Apr 00 . # . |11287.08 + . *
Wed 12 Apr 00 . |# . |11125.13 |+. *
Thu 13 Apr 00 # | . |10923.55 + . *
Fri 14 Apr 00 # . I . |10305.77 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~
Mon 17 Apr 00 # I . |10582.51 | .- *
Tue 18 Apr 00 . & . |10767.42 | .- *
Wed 19 Apr 00 . #I . |10674.96 | .- *
Thu 20 Apr 00 . & . |10844.05 | .- *
Mon 24 Apr 00 .# I . |10906.10 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Tue 25 Apr 00 . | #. |11124.82 |-. *
Wed 26 Apr 00 . # . |10945.50 |-. *
Thu 27 Apr 00 . #I . |10888.10 |-. *
Fri 28 Apr 00 . # . |10733.91 |-. *
Mon 1 May 00 . | .# |10811.78 |+. *
Tue 2 May 00 . #| . |10731.12 + . *
Wed 3 May 00 # . I . |10480.13 |-.~~*~~~~~~~~~~~~~~~~~~~~~~~
Thu 4 May 00 . #I . |10412.49 |-. *
Fri 5 May 00 . I #. |10577.86 |-. *
Mon 8 May 00 . I# . |10603.63 |-. *
Tue 9 May 00 .# I . |10536.75 |-. *
Wed 10 May 00 #. I . |10367.78 |-. *
Thu 11 May 00 . I #. |10545.97 |-. *
Fri 12 May 00 . I #. |10609.37 |-. *
Mon 15 May 00 . I .# |10807.78 + . *
Tue 16 May 00 . |# . |10934.57 |+. *
Wed 17 May 00 # I . |10769.74 |+. *
Thu 18 May 00 . #I . |10777.28 + . *
Fri 19 May 00 # . I . |10626.85 |-. *
Mon 22 May 00 #. I . |10542.55 | .- *
Tue 23 May 00 # I . |10422.27 | . - *
Wed 24 May 00 .# I . |10535.35 | . - *
Thu 25 May 00 # I . |10323.92 | . - *
Fri 26 May 00 .# I . |10299.24 | .- *
Tue 30 May 00 . I #. |10527.13 | - *
Wed 31 May 00 . I #. |10522.33 |-. *
Thu 1 Jun 00 . | .# |10652.20 +. *
Fri 2 Jun 00 . | . # }|10794.76 |+ *
Mon 5 Jun 00 . |# . |10815.30 |+ *
Tue 6 Jun 00 . |# . |10735.57 |+ *
Wed 7 Jun 00 . | #. |10812.86 |+ *
Thu 8 Jun 00 . #| . |10668.72 |+. *
Fri 9 Jun 00 . |# . |10614.06 +. *
Mon 12 Jun 00 . # . |10564.21 +. *
Tue 13 Jun 00 . | #. |10621.84 +. *
Wed 14 Jun 00 . | # |10687.95 |+. *
Thu 15 Jun 00 . # . |10714.82 |+. *
Fri 16 Jun 00 . #| . |10449.30 +. *
Mon 19 Jun 00 . |# . |10557.84 |+. *
Tue 20 Jun 00 . #| . |10435.16 +. *
Wed 21 Jun 00 . # . |10497.74 |-. *
Thu 22 Jun 00 . #I . {|10376.12 |-. *
Fri 23 Jun 00 # I . |10401.75 |-. *
Mon 26 Jun 00 . & . |10452.99 |-. *
Tue 27 Jun 00 . I# . |10524.46 |-. *
Wed 28 Jun 00 . |# . }|10527.29 |-. *
Thu 29 Jun 00 . |# . |10398.04 +. *
Fri 30 Jun 00 . #| . |10447.89 +. *
Mon 3 Jul 00 . | . # |10560.67 |+. *
Wed 5 Jul 00 . | #. |10483.60 |+. *
Thu 6 Jul 00 . | #. |10481.47 |+. *
Fri 7 Jul 00 . | .# |10635.98 | + *
Mon 10 Jul 00 . | .# |10646.58 | .+ *
Tue 11 Jul 00 . | # |10727.19 | .+ *
Wed 12 Jul 00 . | # |10783.41 | .+ *
Thu 13 Jul 00 . | # |10788.71 | .+ *
Fri 14 Jul 00 . | # |10812.75 | .+ *
Mon 17 Jul 00 . | #. |10804.27 | + *
Tue 18 Jul 00 . #| . |10739.92 | + *
Wed 19 Jul 00 . # . |10696.08 |+. *
Thu 20 Jul 00 . |# . |10843.87 |+. *
Fri 21 Jul 00 . # . |10733.56 + . *
Mon 24 Jul 00 . & . |10685.12 + . *
Tue 25 Jul 00 . I# . |10699.97 + . *
Wed 26 Jul 00 . #I . |10516.48 + . *
Thu 27 Jul 00 . I# . |10586.13 + . *
Fri 28 Jul 00 # I . {|10511.17 |-. *
Mon 31 Jul 00 . I #. |10521.98 + . *
Tue 1 Aug 00 . I .# ]|10606.95 + . *
Wed 2 Aug 00 . I # |10687.53 |+. *
Thu 3 Aug 00 . & . |10706.58 |+. *
Fri 4 Aug 00 . | # }|10767.75 | + *
Mon 7 Aug 00 . | . # |10867.01 | .+ *
Tue 8 Aug 00 . | .# |10976.89 | .+ *
Wed 9 Aug 00 . | #. |10905.83 | + *
Thu 10 Aug 00 . | # |10908.76 | .+ *
Fri 11 Aug 00 . | .# |11027.80 | .+ *
Mon 14 Aug 00 . | . # |11176.14 |~.+~~~~~~~~~~~~~~~~~~~~~~~~~~~~~*
Tue 15 Aug 00 . | #. |11067.00 | .+ *
Wed 16 Aug 00 . | #. |11008.39 | .+ *
Thu 17 Aug 00 . | . # |11055.64 | .+ *
Fri 18 Aug 00 . #| . |11046.48 | + *
Mon 21 Aug 00 . | #. |11079.81 | + *
Tue 22 Aug 00 . | #. |11139.15 | + *
Wed 23 Aug 00 . |# . |11144.65 |+. *
Thu 24 Aug 00 . | #. |11182.74 |+. *
Fri 25 Aug 00 . | #. |11192.63 |+. *
Mon 28 Aug 00 . | .# |11252.84 | + *
Tue 29 Aug 00 . |# . |11215.10 | + *
Wed 30 Aug 00 . | #. |11103.01 | + *
Thu 31 Aug 00 . | .# |11215.10 | + *
Fri 1 Sep 00 . | .# |11238.78 | .+ *
========================================================================
COMMENT on NASDAQ "Timer's Trend": The trend continues down since I began tracking
this on February 28, 2000, though we currently are not too far from the point where we
might see a buy signal, if the recently modestly bullish posture of the NASDAQ average
continues for awhile.
____________________________ NASDAQ TIMER'S TREND ____________________________ Mon 3 Apr 00 # . I . | 4223.68 |~*~~-~~~~~~~~~~~~~~~~~~~~~~~ Tue 4 Apr 00 # . I . | 4148.89 @| . - * Wed 5 Apr 00 #. I . | 4169.22 @| . - * Thu 6 Apr 00 . I# . | 4267.56 | . - * Fri 7 Apr 00 . I #. | 4446.45 | .- * Tue 11 Apr 00 # . I . | 4055.90 | .- * Wed 12 Apr 00 # . I . | 3769.63 |~.-~~~~~~~~~~~~~~~~~~~~~~~~~ Thu 13 Apr 00 # . I . | 3676.78 | . - * Fri 14 Apr 00 # . I . | 3321.29 @|~.~~~-~~~~~~~~~~~~~~~~~~~~~~ Mon 17 Apr 00 #. I . | 3539.16 @| . - * Tue 18 Apr 00 . & . | 3793.57 @|~.~~~-~~~~~~~~~~~~~~~~~~~~~~~~~~ Wed 19 Apr 00 #. I . | 3706.41 | . - * Thu 20 Apr 00 # . I . | 3643.88 | . - * Mon 24 Apr 00 # . I . | 3482.48 |~*~-~~~~~~~~~~~~~~~~~~~~~~~~ Tue 25 Apr 00 . I #. | 3711.23 | .- * Wed 26 Apr 00 # I . | 3630.09 | . - * Thu 27 Apr 00 . #I . | 3774.03 | .- * Fri 28 Apr 00 . I# . | 3860.66 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~* Mon 1 May 00 . I #. | 3958.08 + . * Tue 2 May 00 #. I . | 3785.45 |-. * Wed 3 May 00 # . I . | 3707.31 | - * Thu 4 May 00 .# I . | 3720.24 | - * Fri 5 May 00 . & . | 3816.82 | .- * Mon 8 May 00 #. I . | 3669.38 | . - * Tue 9 May 00 # . I . | 3585.01 |~.~*~~~~~~~~~~~~~~~~~~~~~~~~ Wed 10 May 00 # . I . | 3384.73 |~.~*~~~~~~~~~~~~~~~~~~~~~~~~ Thu 11 May 00 . #I . | 3499.58 | . - * Fri 12 May 00 . #I . | 3529.06 | . - * Mon 15 May 00 . & . | 3607.65 | .- * Tue 16 May 00 . I # | 3717.57 | - * Wed 17 May 00 # . I . | 3644.96 |-. * Thu 18 May 00 #. I . | 3538.71 | - * Fri 19 May 00 # . I . | 3390.40 | .- * Mon 22 May 00 # . I . | 3364.21 | . - * Tue 23 May 00 # . I . | 3164.55 @|~.*~~~-~~~~~~~~~~~~~~~~~~~~~ Wed 24 May 00 #. I . | 3270.61 @| . - * Thu 25 May 00 # . I . | 3205.35 @| . - * Fri 26 May 00 # . I . | 3205.11 @| . - * Tue 30 May 00 . I# . | 3459.48 | . - * Wed 31 May 00 # I . | 3400.91 | . - * Thu 1 Jun 00 . I # | 3582.50 |~-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~* Fri 2 Jun 00 . I . # | 3813.38 +. * Mon 5 Jun 00 . I# . | 3821.76 |+. * Tue 6 Jun 00 . & . | 3756.37 |+. * Wed 7 Jun 00 . |# . | 3839.26 |+ * Thu 8 Jun 00 . & . | 3825.56 |+. * Fri 9 Jun 00 . | # | 3874.84 |+.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~* Mon 12 Jun 00 .# I . | 3767.91 +. * Tue 13 Jun 00 . & . | 3851.06 +. * Wed 14 Jun 00 . #I . | 3797.41 +. * Thu 15 Jun 00 . #I . | 3845.64 |-. * Fri 16 Jun 00 . & . | 3860.56 |-. * Mon 19 Jun 00 . I# . | 3989.83 |-. * Tue 20 Jun 00 . I# . | 4013.36 +. * Wed 21 Jun 00 . I# . | 4064.01 +. * Thu 22 Jun 00 . & . | 3936.84 +. * Fri 23 Jun 00 # . I . | 3845.34 |-. * Mon 26 Jun 00 . & . | 3912.12 |-. * Tue 27 Jun 00 .# I . | 3858.96 |- * Wed 28 Jun 00 . I #. | 3940.34 |-. * Thu 29 Jun 00 # I . | 3877.23 |- * Fri 30 Jun 00 . I #. | 3966.11 |-. * Mon 3 Jul 00 . I #. | 3991.93 + . * Wed 5 Jul 00 .# I . | 3863.10 + . * Thu 6 Jul 00 . I #. | 3960.57 + . * Fri 7 Jul 00 . I #. | 4023.20 |+. * Mon 10 Jul 00 . & . | 3980.29 + . * Tue 11 Jul 00 . & . | 3956.42 + . * Wed 12 Jul 00 . I . # | 4099.59 |+. * Thu 13 Jul 00 . I .# | 4174.86 |~+~~~~~~~~~~~~~~~~~~~~~~~~~~~~~* Fri 14 Jul 00 . | . # | 4246.18 | + * Mon 17 Jul 00 . | # | 4274.67 | .+ * Tue 18 Jul 00 . #I . | 4177.17 | .+ * Wed 19 Jul 00 # I . | 4055.63 |+. * Thu 20 Jul 00 . I # | 4184.56 |+. * Fri 21 Jul 00 .# I . | 4094.45 + . * Mon 24 Jul 00 #. I . | 3981.57 | - * Tue 25 Jul 00 . #I . | 4029.57 | - * Wed 26 Jul 00 #. I . | 3987.72 | - * Thu 27 Jul 00 # . I . | 3842.23 |*.~-~~~~~~~~~~~~~~~~~~~~~~~~ Fri 28 Jul 00 # . I . | 3663.00 |~.~~*~~~~~~~~~~~~~~~~~~~~~~~ Mon 31 Jul 00 . #I . | 3766.99 | . - * Tue 1 Aug 00 #. I . | 3685.52 | . - *> Wed 2 Aug 00 # I . | 3658.46 | . - * Thu 3 Aug 00 # I . | 3759.88 | . - * Fri 4 Aug 00 . & . | 3787.36 | .- * Mon 7 Aug 00 . I #. | 3862.99 | - * Tue 8 Aug 00 . #I . | 3848.55 |-. * Wed 9 Aug 00 . & . | 3853.50 |-. * Thu 10 Aug 00 #. I . | 3759.99 |-. * Fri 11 Aug 00 .# I . | 3789.47 |-. * Mon 14 Aug 00 . & . | 3849.69 | - * Tue 15 Aug 00 . #I . | 3851.66 | - * Wed 16 Aug 00 . #I . | 3861.20 | - * Thu 17 Aug 00 . I# . | 3940.87 |-. * Fri 18 Aug 00 . I #. | 3930.34 + . * Mon 21 Aug 00 . I# . | 3953.15 + . * Tue 22 Aug 00 . I# . | 3958.21 + . * Wed 23 Aug 00 . I# . | 4011.01 |+.~~~~~~~~~~~~~~~~~~~~~~~~~~~~* Thu 24 Aug 00 . I# . | 4053.28 |+. * Fri 25 Aug 00 . I# . | 4042.68 |+. * Mon 28 Aug 00 . I .# | 4070.59 |+. * Tue 29 Aug 00 . I #. | 4082.17 |+. * Wed 30 Aug 00 . I # | 4103.81 | + * Thu 31 Aug 00 . | . # | 4206.35 | .+ * Fri 1 Sep 00 . | # | 4234.33 | .+ * ========================================================================"Timer's Trend" is based on 4% and 10% exponential moving averages of the New York Stock Exchange or NASDAQ advance/decline lines (that is, the ratio of advancing to declining stocks). There are many symbols shown above, but the ones that count are the braces:
NEXT ISSUE - will appear about September 29.
/Nick Chase