4/4/05 Journal

...A message board I frequent had a repost of a February 2005 Daily News interview with Joe Granville, an 81 year old market maven who has had a newsletter for what seems forever. Granville at times in the 60's and 70's had such a wide following that it seemed he could move the markets with some of his pronouncements.
...He was famous for calling the bear market of 1973-74, and the 2000 market top, but missed on some other calls, such as being bearish and completely missing the bull run from 1982-1986. As a result, from what I hear, he has lost much of his following.
...In the article, Granville is calling for a Dow of 7400 before year end, and the Nasdaq below 1000. He thinks the markets are in a more precarious position than they have been in years.
...The article ended with a Granville quote, "People don't realize that most who think we're headed higher are the same people who missed January," he said. "I am the exact opposite of Wall Street."
...To which one of the wags on the board responded, "I guess that means he's honest and poor."
I like it.
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...Today's rebound was tepid at best, and the market remains at some important support and resistance levels. DaBoyz parked the S&P just above the 1175 mark at the close. 1175 has been a congestion zone several times going back to December.
...The S&P is below the downtrending 50 day EMA, but still above the 200 day EMA. The Nasdaq 100 still sits below its 200 day EMA, which is serving as daunting resistance in recent days.
...Once again NYSE volume exceeded Nasdaq volume, 2.1 million to 1.6 million, which is yet another sign of a weak market. The NYSE had 59 new highs vs 57 new lows, and the Nasdaq had 42 new highs and 135 new lows.
...Although a lot of indicators are oversold, there has been little buying enthusiasm. The bulls need to get something going, or there is real danger of increased selling.
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...Oil stocks took a mid-day hit today, and it will be interesting to see if that constitutes a key reversal day or a head fake. Several energy stocks I follow regularly were up strong this afternoon, then sold off, all on heavier than normal volumes.
...For instance, one of my favorites, XTO, was up a $1.91 at its top today before selling off. It recovered some in the late afternoon to close up $.74, on 6 million shares volume, as compared to its 3 month average of 3.4 million shares.
...VLO, the refinery stock, fared even worse. At its top today, it was up $1.94 to $79.70. From there it collapsed, ending down $1.11 on the day at $76.65, a cool collapse of $3.05, on 10.7 million shares volume, as compared to its 3 month average of 4.8 million shares.
...It was interesting that AIG received two upgrades today from major brokerage houses, along with a statement from NY AG Eliot Spitzer that he expected a civil settlement could be reached with the company. Some folks had feared there might be criminal investigations, and that wouldn't be good news for the markets or DaBoyz. AIG end up $2.35 a share on volume of 67 million shares, versus their 3 month average of 11 million. But, of course, it had also been down $4.46 a share Friday on volume of 70 million shares. So I'm not sure that today's action means it is out of the woods, or was just a technical rebound, or was just more distribution to the folks who bought in thinking they were getting a deal on a quality stock. I guess time will tell.
...XAU had another weak day and is still mired beneath both its 50 day and 200 day EMAs, with the 50 day EMA heading down toward the 200 day EMA, none of which is good for the gold buggers. I rarely trade gold stocks anymore. Years ago, I used to trade them regularly, but I found that for whatever reason, I didn't have success trading them...And I'm not a true believer as many of the buggers are, that gold will once again become currency. I don't think that is ever going to happen. We are indeed in a new era, and the PTB will never allow gold to become currency again. It would be disastrous for their fiat money systems. Whether that's good or bad depends on your viewpoint, I suppose.
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