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Bert Dohmen's Weekly Hotline
November 22, 2000
"ABBREVIATED VERSION"
Substantial portions deleted in fairness to paying customers.
Although this was half a week, there was plenty of excitement. Unfortunately
for the bulls, all the excitement was to the downside. If you were short,
you
had a pretty good three days.
The NASDAQ Composite plunged through support at 2,859, which is a very
negative event. The index closed at 2,755, down a hefty 272 points for the 3
days of this week. The number of new lows for the last year keeps expanding,
confirming that this is a vicious bear market. The index is now ready to
continue to my eventual target area of 2,200, although an election surprise
could interrupt that journey for a few days. There is some support at the
2,450-2,500 area, which could at least produce a bounce.
The Dow Jones Industrials, so far, have been a safe haven for money managers
who must be invested. But eventually, in a serious market decline as this
one, even the safe haven areas in the stock market will give way to the tide,
with a few exceptions. That index closed at 10,399, down 230 for the 3 days.
I expect it to eventually get to the 8,900 area.
Everything I wrote in the editions of the Wellington Letter over the past two
months is becoming a reality. It's scary. Sometimes it's not pleasant to be
right. The Asian Tiger countries and the Latin America markets are
deteriorating quickly. Their currencies are being shunned and their stock
markets are in serious declines. The next phase will be a total confidence
crisis in this area, with foreign money flowing out rapidly.
In the U.S., the credit squeeze is intensifying, and now even large telecom
firms are having difficulty getting financing. One analyst commentated that
the squeeze is already more serious than in 1990, which was the last serious
credit crunch.
To me, it's amazing how many Wall Street analysts still say that Mr.
Greenspan
is getting just what he wanted. I believe Greenspan is going to get ten
times
more than what he wanted. But members of the Federal Reserve will be the
last
ones to notice it. They are so isolated from the real world that they are
usually 6 - 12 months late in recognizing the damage they have done.
I see Wall Street analysts on TV acting more like cheerleaders, pretending to
be very bullish. They say that the next phase will be for the Feds to loosen
money, which will be bullish for the market. I agree, except I believe that
won't come until the panic is in full swing.
I want to take this opportunity to wish all of our valued subscribers a
wonderful Thanksgiving. In spite of the dismal market and the maneuvering in
Florida, we still have a lot to be thankful for. I have been to many places
around the world, and this is still one of the best in my book.
Bert Dohmen
*************************
ABOUT BERT DOHMEN: Bert Dohmen is president and founder of Dohmen Capital
Research Institute, Inc.(DCRI) He has achieved an international reputation
for his expertise in forecasting the major investment markets, interest
rates,
and economic trends.
Bert Dohmen is known as a Fed watcher and a contrarian. You may have seen
him
on Louis Rukeyser's "Wall Street Week," CNN's "Moneyline," or CNBC Financial
News Network. He is frequently quoted in The Wall Street Journal, BARRON'S,
Business Week, and other leading publications. He was ranked one of the
"Top
Ten Stock Market Timers" (including a number one ranking.) Bert Dohmen's
WELLINGTON LETTER was rated #1 in the United States in a national survey by
Futures magazine.
Bert Dohmen's WELLINGTON LETTER is an award-winning monthly investment
newsletter with an impressive 22 year track record. His readers have
prospered in bull and bear markets alike. Not only can he show you where and
when to invest during fantastic bull markets like today, but he can get you
out of dangerous situations, as in 1994 when his readers were able to
sidestep
major disasters such as the US Treasury Bonds, the Dow Jones Utilities, the
US
Stock Market and the emerging markets.
excellent
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