Maybe This Time...

What to do? What to do? It's kind of tough being an investor these days. I am not talking about all the tricky action or the historic losses in technology. I am talking about what I see and hear every day in this business. How does one keep their wits about them when a famous market strategist comes out with a "forecast" of a 75% gain in the Nasdaq for the year 2001? Yes, I said 75%. How about another famous pundit saying it was a "lock" for the Dow and S&P 500 to rise 40% for 2001? Then there is another famous "permabear" calling for a 500 Dow. Of course, this person has been calling for 500 since 2000. Hey, I will buy all the $10 IBM I can find.

The answer on what to do upon hearing all this: Listen, but pay zero attention. I know it's tough but it is important to learn a lesson from last year about how far off the average forecast was. Marder, Fleckenstein and other great technicians have learned that forecasting is a loser's game. They don't forecast, they evaluate. The real success in the market does not come from trying to figure out where things will be a year from now, but what is happening now. After all, the "Psychic Friend's Network" filed for bankruptcy.

Now to the market.

I mentioned in my last report that one day of distribution in the Nasdaq is no big deal. Well, yesterday was number 2. Two days of distribution rings the bell a little louder. Simply put, I don't want to see 3 and 4. With all the breakdowns I am seeing in tech, any more distribution days can bury this attempted rally.

Leadership remains with "value" and retail/apparel. (BCF | Quote | Chart | News | PowerRating), (BJ | Quote | Chart | News | PowerRating), (CVS | Quote | Chart | News | PowerRating), (LDG | Quote | Chart | News | PowerRating), (PSS | Quote | Chart | News | PowerRating) and others are all providing constructive action. So far! I don't believe these areas have enough earnings power to sustain long moves but ... you never know.

By the way, bullish advisors just hit 61.8%. I believe this is at least a 10-year high. NOT HAPPY WITH THIS NUMBER. New bull markets don't usually start with this type of optimism. Maybe this time it's different....