STOCK MARKET DIRECTION Newsletter Online © May 20, 2004
STOCK MARKET DIRECTION by Steve Zito Financial Newsletter Service
Technical Indicator Analysis of the Dow, Nasdaq Composite Index
Redistribution only with permission of the webmaster Steve Zito
click TOP RANKED STOCK PICKS, 17 of 18 gain, average gain +210%
SUBSCRIBE Updates published DAILY. Index of MY PUBLISHED ARTICLES
STOCK MARKET DIRECTION by Steve Zito Newsletter for Thursday, May 20, 2004
AMD emerges in China in a big way by establishing a Mainland China subsidiary
to compete with Intel: http://biz.yahoo.com/bw/040519/186191_1.html
Information in this newsletter is based on prices from Wednesday, May 19, 2004
Dow Jones Industrial Average
----------------------------------------- 9,937.71 -30.80 (-0.31%)
Nasdaq Composite Index
----------------------------------------- 1,898.17 + 0.35 (+0.02%)
Standard and Poors 500 Index
----------------------------------------- 1,088.68 - 2.81 (-0.26%)
10-Year Note yield
-------------------------------------------- 4.794% +0.058
DOW JONES INDUSTRIAL AVERAGE analysis:
The Dow Industrial Average closed 9,937.71 -30.80 at 0.6% under the Dow's
short-term moving average, which has declined for 16 straight trading days.
Keep in mind, the moving average only smoothes a trend of daily up and downs.
Did I write yesterday, "Get one good day to take (the) Dow over the 7-day moving
average, it will force eager traders and mutual funds to buy into stocks"? I did.
For most of Wednesday, the Dow was up more than 100 points (Nasdaq up 30 as well)
but then Iraq deception roared a hooded head again in late afternoon, that's all.
Nothing to do with interest rates, or even oil, which was up only around $0.50.
While the Pentagon claimed its 40 "suspects" were "neutralized" by aerial bombing,
Arab TV showed video of same 40 bodies lying in the Iraqi desert, after a wedding.
In face of photo evidence U.S. jet bomber raid hit the wrong target, more denials.
What did Bush say of the 12-year old children blown to bits? No child left behind?
His favorite program. Or, "they're free, and freedom is beautiful?" Dead or not.
Why did the DowJIA give up its 1% gain in just the last two hours? More military
coverup revealed as the Pentagon tried to hide an obliteration by aerial bombing
of 40 guests at an Iraqi wedding party, but photos on Arab TV showed the truth:
What did Maria Bartiromo say caused the Dow stocks to crumble? Higher oil prices,
next CNBC showed a price chart and oil was up only $0.50 on the day. CNBC's Maria
next interviewed NYSE floor traders on what they think of former NY Mayor Guiliani,
floor specialist Peter Henderson said poor Rudy G. "doesn't deserve any criticism."
This while others aired live footage of Rudy Guiliani being heckled in hearings:
What did CNBC's Bob Pisani say at the end of the day from the NYSE trading floor?
He said on CNBC the morning rally was "highly suspect" and likely short-covering,
"light volume." It's funny he never said it in March 2000 with the Dow at 11,700.
In fact, he never used that description when Intel was $72, or Microsoft was $59.
Okay, so both techs were not in the Dow back in 2000. How about GE? It was $52.
The trading volume on GE is higher today with GE at 30, than making highs at 52.
Well, okay, back in 2000, GE did not have to purchase Kevlar body armor for its
overseas GE employees, like the hundreds GE just pulled out of Iraq. Back in 2000,
GE did not have to hide labor outsourcing for power plants construction in China.
You may ask, shouldn't Chinese labor at 5% of the payrate of American workers in
GE's China construction projects boost GE profit? Not if the construction is so
bad, it has to be rebuilt over and over to get it right. Quality is not JOB one.
Other countries stock markets are looking better, since they don't have Iraqgate.
Other countries with booming markets are India, China, Taiwan, Japan, and Tibet.
What, Tibet? At war with China? Well no one hears Dalai Llama say, "Bring it on!"
Japan's Nikkei Dow has rallied from the 8,000 level to 11,000 since March 2003.
Leading companies are electronics and autos, which export to, and build in USA.
I wrote yesterday, If you were stopped out of Toyota Motor TM, it's time to buy.
Toyota was up to 75 when Nikkei first hurdled 11,000 this year, and sold to 66.
TM closed at 68.95 -0.05 (-0.07%) down 9.9% from 76.50 on April 22 when Japan's
Nikkei recently peaked. While a leader in Nikkei Dow, TM is not tied to Japan.
Toyota is the world's 2nd largest automaker, and sells mainly in US and Europe.
Dow stochastics fell from 50%/46% Tuesday to near oversold at 35%/35% Wednesday.
The only good thing about Monday was the Dow never traded below last week's low.
The only bad thing about Tuesday was a rising Dow could not even get over 10,000.
Wednesday, the Dow soared well over 10,000 until 2 PM, when Iraq news broke that
40 innocent women and children attending an Iraq wedding were wasted by warriors.
What did Generals say? We're only human and make mistakes, so wanna target shoot?
Give the story at least a day to fade away. By Saturday, Americans will be cooking
hot dogs, watching Nascar races (Bush's favorite sport), readying for Memorial Day.
It's a time to remember veterans of war. Our heroes can't be expected to tell the
difference between Iraqi insurgent turbans and Iraqi wedding hats from 2 miles up.
To U.S. air power, a turban is a turban, no soldier feels sorry for enemy turbans.
NASDAQ COMPOSITE INDEX analysis:
Nasdaq Composite closed 1,898.17 +0.35 at 0.4% below irritating 16-day downtrend.
Nasdaq has not declined every single day for 16 days, but Nasdaq's moving average
smoothes the trend to show what the trend is, and for now, that trend is lower.
That would have changed because Wednesday, up to 2:00 PM, the Nasdaq was headed
for an important close well above the short-term downward trendline on charts.
I use the exponential 7-day moving average, far more effective for day-trading.
Chalk Wednesday up as a failed rally, reversal, a continuation of choppy trade.
Don't attribute it to interest rates. Rates were sharply higher all day, but so
were stocks, until news about Iraq crossed the wires, as well as the heckling of
N.Y.'s favorite son, Rudy Guiliani. Those family members of the dead 9-11 victims
appeared at Guiliani's 9-11 hearing, they just have no right to call him, "idiot."
An Italian-American (same as me), Rudy Guiliani should command the same respect
as HBO's Tony Soprano, but ever since his wife divorced Rudy, women dislike him.
Rudy is fresh off a Mexico City security stint, who paid $10 million for advice.
Likely Rudy told Mexico City, best thing to do is not build any tall buildings.
Nasdaq stochastics went sideways from 41%/29% Tuesday to 40%/29% on Wednesday.
Like the Dow, a completely disappointing reversal, coming after Hewlett Compaq
and its CEO, Harvard grad Carly Fiorina showed Michael Dell what selling PC's is.
If Dell had brains at the top like HPQ's, Dell would be twice as large as HPQ.
Don't believe me? Just watch an idiotic "you're gettin' a Dell" TV commercial.
Still don't believe me? Get DELL's annual report and compare marketing cost to
research and development expense, it's why you see a Dell TV ad every 5 minutes.
DELL closed 34.05 -0.31 (-0.90%) and Hewlett Compaq HPQ at 20.55 +0.72 (+3.63%)
Word is hitting the Street that semiconductor sales will be up 30% this year.
Quality chip companies have declined in a big way since January expecting some
slowdown that just is not occurring. Time to buy, but not over-valued Intel INTC.
Rival AMD sells China in a big way by establishing a Mainland China subsidiary
to compete with competitor Intel: http://biz.yahoo.com/bw/040519/186191_1.html
and I have written many times in previous months to buy AMD at 15, sell at 18.
INTC closed at 27.11 -0.04 (-0.15%) while AMD closed at 14.49 +0.54 (+3.87%).
AMD is down from intra-day 17.60 on April 13, to intra-day low 13.62 on May 18.
Expiring stock options this Friday should nail AMD to the nearest strike at 15.
If you are having a bad day, imagine what Rudy Guiliani, legend in his own mind,
is feeling with 9-11 victim families yelling, you're responsible for my kid.
What did CNBC's Maria Bartiromo say on-air when she heard that? "Uhhh (sigh)."
Thanks for reading this edition of Stock Market Direction by Steve Zito.
Copyright Notice, all pages Copyright©2004 and are made available as my
service to the global Internet community. Pages may never be reproduced,
distributed, or sold in any medium without obtaining written permission
from Steve Zito. Additional information on website. This sample is free.
New subscriber rate only US $59 for 6 months. Newsletters are emailed
normally Monday through Friday. Payment accepted by check or money order.
E-commerce payments from bank accounts are also accepted through PayPal.
For complete subscription information, click on the Subscription Page at
Credit cards are also accepted with Yahoo Pay Direct and now with PayPal.
Copyright Notice, all pages Copyright©2004 and are made available as a service to the global Internet community.
Pages may not be reproduced or sold in any medium without explicit, written permission from Steve Zito.