Report Card
It is report
card time for Gary. Going forward, whether right or wrong, I will
issue myself one at the end of each quarter. It is the only way I learn from
mistakes and enhance the successes. I suggest you critique yourself each
quarter. It can only help.
It was a great first quarter for this column. Before I get into specifics, my
overall bearish views on the market technicals throughout the quarter kept my
readers in cash. January was tough to stay bearish but I knew the move only had
to do with the January effect.
Every breakout I talked about, failed. (Not so good. But in my defense, I warned
you everything was failing and to be careful.) So, not so bad.
My specific calls:
1/8/01:
A few days after the monster rally on the first Fed rate cut: “Do you think
the markets are going to accommodate everyone by ringing a loud bell at the
bottom? I don’t think so. The bell didn’t ring at the top. Just ask all the
analysts. Last Wednesday’s monster day was too loud for my taste.” Bingo!
In the same report, I also mentioned the topping out of Healthcare, Insurance
and Utilities. All three have been under pressure but Healthcare is
especially toast.
1/11/01:
“Several financials are setting up nicely.” Well, they
were! Doofus!
1/18/01:
“The Biotech Trust
(
BBH |
Quote |
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PowerRating) shows a clear topping out. I would be
watching carefully. Not only does it look about as suspect as they come but
individual names look horrible.” Bingo!
2/1/01:
“The percentage of bullish advisors rose to 61% yesterday. This is a five-year
high. Considering the major drop in the Nasdaq, it is amazing that this number
has not dropped. Why is this important? When this number goes to extremes, most
often, it means an opposite move in the market. Sixty-one percent is an extreme
number.” Bingo!
2/26/01:
“I am more interested in writing about interest-rate-sensitive sectors.
They have been the linchpin for many bullish analysts to hold onto during the last year. They have now topped, at least in the near term. Banks,
finance, homebuilders and utilities have all now started to play catch-up. So what’s left? Not much. If these sectors are becoming toast while
the Fed is lowering rates, there may be more wrong than meets the eye.” Bingo!
3/1/01:
“The S&P 500 looks horrid and the Dow looks ready for the big
kazoo. You may want to take a gander at these charts on a weekly basis going
back five years. Looks like one big giant broadening top.” Bingo!
3/5/01:
“One of the only areas that is showing potential for breakouts at this
moment is the Oil and Gas. A bunch of names are poised to pop out at this
juncture.” Doofus!
3/9/01:
“I will say one thing: It is the same caveat I have been giving for
the past five years every time cyclicals start to outperform. They look good,
trade well and are now leading….but don’t expect it to last very long.” Bingo!
3/19/01:
“The Dow is now in worlds of trouble as it sliced through 10,300 support
like a hot knife in butter. I never predict, but a five-year chart shows that
odds favor 9200 is the next stop. I wouldn’t bet against it.” Double
Bingo!
“I am starting to get the feeling that the Nasdaq will start outperforming
the Dow-type stocks. This is not because we are excited with the Nasdaq. In fact, except for Semi-Equipment, there is hardly anything remotely resembling
anything to look at. So no buying in these areas. My thoughts are based on the
fact that I believe the Nasdaq is now in the latter stages of its decline. Hey,
after 64%, the rate of decline has to slow down somewhere.” So far — Bingo!
That leads me into yesterday’s action. It rates a big “Wow!” The Nasdaq
is now going into out-performance mode. I believe some more upside testing is in
order. I just don’t know how long any rally can last. Certainly, there are some
positives that are lining up right now, but it is mostly on the sentiment side.
Technically, a lot more work to be done. As far as the Dow, well, after a drop
of 1700 points since March 8, I wouldn’t get too excited about a decent late-day
bounce just yet. More to come Monday
All in all, I am quite proud of this column. It has been one of the most
harrowing quarters in history. My technical calls have — so far — been right
on the money. I only hope they have contributed to a better return for all.