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....