RE: [CANSLIM] Bear Rally?

From: "Hill, Ernie" <Ernie.Hill@ElPaso.com>
Subject: RE: [CANSLIM] Bear Rally?
Date: Sat, 13 Apr 2002 20:56:33 -0500

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Patrick,

I can only speak about the S&P 500 because that is the index I concentrate
on because it represents the broad market and includes old economy stocks as
well as tech stocks.

My model suggests a strong probability of an intermediate term low being
made next week in this index most likely on Tuesday or Wednesday. I expect
the S&P to test the 1075 support level and close above the 1085 level on the
day it puts in the low.

This low should set the stage for a four to five week advance. If this
up-swing in the market takes out the recent highs near 1175, which I believe
it will then the case for a new bull market remains intact. However, if it
fails to take out the highs near 1175 then we may have already seen the high
in the market for this year.

E

- -----Original Message-----
From: Patrick Wahl [mailto:pjwahl@attbi.com] 
Sent: Saturday, April 13, 2002 1:44 PM
To: canslim@lists.xmission.com
Subject: Re: [CANSLIM] Bear Rally?

On 13 Apr 2002 at 12:35, Duke Miller wrote:

> I don't want to start anything, but....since it's the weekend.

oh sure....

> So what kind of market are we in, anyway?
>  

I was trying to answer this question the other night, all I could figure out
is that the 
market is mixed up.  Here are some observations, maybe someone can put
things 
together.

Nasdaq selling off after rally to a lower high than the high set in January.
Right now 
sitting near support set about 2/22, below 50 day MA, which is sloping down.

S&P a little stronger, recent rally carried it just about back to old highs,
it is 
somewhat above those Feb. lows, support around 1075, also below 50 day.

Dow quite a bit stronger, the recent high surpassed the Jan. highs, recent
selloff not 
as severe, it's sitting on 50 day MA.

Russell 2000 at its highest level since July, made new high on Friday
relative to last 
8 or 9 months.

Vix is up a little bit, off  the very low levels it was at, but still
towards the low end of 
its range  (lower means too much optimism, a contrary indicator).  I also
notice that 
the cummulative A/D line for the NYSE has been in a steady uptrend since
Sept. 
lows, the Nasdaq A/D line has rallied a bit, but for the last 2 months has
gone 
sideways to lower.

Lets see - large caps doing ok in the form of the Dow, small caps are the
strongest 
group as represented byt the Russell 2000 (that would be our little universe
of 
canslim stocks), the S&P and Nasdaq, I think you could say the real guts of
the 
market in terms of broad representation of industries and a large chunk of
the total 
market cap, are looking flat to weak.

Maybe someone can say something about which stocks should be leading if we
are 
at the beginning of an economic recovery, I'm not sure how to interepret
this stuff, 
like I said.   I think valuations may still be weighing on the nasdaq, and
what I am 
reading says this will be a weak to moderate recovery, so earnings may not
be 
storng enough to allow the nasdaq  to really get rolling this year.

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