Just The Facts, Ma’am

continued to be our friend as we have been successful in shorting all

rallies. The S&P cash is approaching very solid Fibonacci support
in the

1173-75 area which should (emphasize “should”) provide short-term
support.” 

As expected, the S&P 500 index held support in this zone and
proceeded to

rally nearly 5% over the next two trading sessions.

From July 14th commentary:  “The chart of the NDX shows a
“spinning top”

formation on Friday that indicates that the current move up is
becoming

exhausted.  Of course, one single bar does not a signal make, but
it is an

early warning that the bulls may have expended a lot of their
ammunition the

last few sessions. Be on the lookout for a retracement in the short
term.”

Indeed, an analysis of the NDX 100 chart below shows that a
retracement is

exactly what we got today.

Ok, in just two commentaries we called a bottom and a top and captured
both

market swings. Do I lose the label as a perma-bear now?

Nvidia (NVDA) continues to plunge deeper into the abyss. Did someone
tell

Barrons about my column bashing the stock’s valuation back in May and
June?

I’d love to believe someone like Alan Abelson reads my column….but I
don’t

think he does. Nevertheless, the stock looks like it is in big trouble
and

will probably continue to decline into the 50’s over the next 3-6
months.

Now for a discussion of NVLS and other semiconductor earnings after
the

close. Who cares. The CEOs of these firms continue to facilitate the
mass

delusion on the street that things have bottomed. The market will be
the

eventual price arbiter of this notion. Stay tuned for Intel’s CEO to
tell us

how great and revolutionary the new Pentium 4 chip is and then reduce
cap ex

spending and lower earnings guidance for the rest of the year. Hurrah.
That

should spark a wonderful rally.

There are some pretty high profile names announcing earnings this week,
which

could, of course, provide more emotional fireworks for some more nifty

after-hours shenanigans. 

The real news will be what kind of GDP number we are going to get next
week. 

We are betting Krispy Kreme donuts around the trading desk here that
the

German and U.S. numbers will be negative. (Can we then start calling
it a

recession or will “slowdown” still continue to be the term
of choice?) 

Whatever the case, I’m out 6 boxes of chocolate iced crullers if the
numbers

come in positive. Some of you may ask why I’ve never discussed the
insane

valuation of KKD stock. The answer? The powers that run that stock are

greater than the wonderful wizard of Oz and, after all, if you can’t
beat

’em…..eat ’em.

The indexes may attempt a bounce tomorrow in which they may
successfully

retrace 50% of the decline from today’s intraday high to low. Be on
the

lookout for buy and sell setups alike. Without question, however, the
market

is changing its mind each and every day regarding its sentiment going

These loyal readers are already lining up outside the Venetian for a
chance to see me at TM2001!