web page http

Week ending July 6, 2001

IN SUMMARY	STOCKS	COMMODITIES
BUYS...	GX, MOT, MON	Coffee, Corn
SELLS...	ATMS	Palladium, Feeder Cattle, Pork Bellies, Euroyen
HOLDS...
WATCH CLOSELY...	GTNR	Cotton, Oats, LC/PB Spread, Note/Bond Spread

STOCKS

NASDAQ- The nasdaq is still trading within its channel, but I expect that to change within the next couple weeks as 2nd quarter earnings reports will be released. I expect some large companies will have positive reports while an equal number of large companies will have negative ones. Now is the time to determine leaders from laggards. I still recommend investing in the larger companies, because as a whole, they will be the first ones to turn profits due to economies of scale.

The tax cut will begin to be distributed this month which will boost the economy a little. Like I said last month, I am projecting the industries that will notice the tax cut first will be retail, banking, and others where the public has direct contact with the industry. Analysts are saying the banking industry is generally the first to come out of recessions. Also they say that certain retail companies will do well such as Walmart. However, not all retail stores will recover right away, so be choosey.

Recessions and market correction periods (even though we are not in a recession) historically have lasted 9 to 15 months. Also, cuts in interest rates generally take 6 to 9 months to show benefits in the market. The decline in the market began in March 2000, and the first interest rate cut occurred in January 2001. It has now been 15 months of market decline, and 6 months since the first interest rate cut. In other words, WE ARE NEAR OR AT BOTTOM! NOW IS THE TIME TO START BUYING, BUT BE PICKY!!!

ATMS- Tidel Technologies came out with a poor news report. Evidently they owe another company approximately $12 million, but don't have the assets to pay them. One thing overlooked when we were looking at fundamental numbers was cash to liabilities ratio. Supposedly it should be 1.2 for this very reason. I will not be surprised if Tidel is bought out since they have a superior product. If they do pay the $12 million, it will be a while, possibly years, before Tidel will get back on their feet. With this news, I am saying Sayonara to Tidel. One interesting point to note if you still want to trade in ATMS: Every channel that has been formed in the last 6 months dropped to approximately 60% of its value. The base of the first channel was at 5. 60% of 5 is 3, which was the bottom of the next channel. Then 60% of 3 is 1.75, which was the bottom of the next channel. 60% of 1.75 is 1, which was the base of the most recent channel. If this continues, and the stock drops below 1, I expect it to form the base of the next channel at $.60.

MOT- I anticipate Motorola stock to continue tumbling for the next week or so. The market has been overbought recently and some selling is occurring. The bottom of this fall will most likely end around 14 or 13. I really doubt the stock will fall below 13 because there is pretty heavy support at 13. But nothing is impossible. Motorola reports its 2nd Quarter Earnings this coming week, and if it has been a rough quarter, it may fall below 13. On the other hand, if the report is better than expected and the price breaks through the resistance line at 17, the stock could climb as high as 23 before the next correction period.
	GX- Global Crossing is my favorite stock pick right now given the market conditions. GX has the only intercontinental fiber-optic cable lines, which incidentally are faster than satellite for continent-to-continent communications. GX has mega dollars flowing through them right now, and they recently announced that they will pay about $1.60 per share in dividends on August 1 to all shareholders as of the close of July 16. Given the current price, even if the price doesn't move, the dividend will be around an 18% gain. However, I expect the price to climb pretty soon because GX also recently announced that its multi-year project to develop the cable network is finally complete, so now they will rake in the dough from leasing to other companies. For all you technical traders out there, volume tells a lot about direction of a stock. As a stock declines or inclines, its volume generally grows. Then, the volume is less the next day, sometimes sharply less. From the last day of the volume increase, the stock generally reverses direction within 2 to 4 days (note circles on chart). Therefore, when you notice the volume decreasing, many times you should reverse your position. Of course there are exceptions to every rule, and the trick is determining when those exceptions occur. Perhaps we will see a move in the stock in the next few days.
GTNR- Gentner is a new company that I am starting to watch. I'm not overly familiar with it yet, but I have been suggested to look into it. It is a fairly small company that most people don't know about yet. As I understand, they are into distance communications and expect their company to really take off if the gas and transportation prices are high because more businesses will use Gentner's technologies to conduct business rather than paying for business trips. Technically trading, this stock looks somewhat bullish to me in the near term. Volume indicates a buy for the reasons I explained in GX. The stochastic appears like GTNR is being a little overbought, but it doesn't indicate a sell yet. I am not sure where the resistance line may be, but there exists a strong support line at about 10.5. Currently the price is at 11, so I don't foresee it dropping too much unless it has a lousy 2nd Quarter Report.
	MON- Monsanto is a good solid company that has market share in the agricultural industry. They have superior products in seed and chemicals, both items farmers rely on for a crop. Don't expect to get rich quick with Monsanto, but it is a slow and steady climber and may be very profitable in a year's time. In the short term, support lines exist at about 35 and again at 33, while a major resistance line is at 39. In short, not very volatile, but slow and steady growth that will be around for a while.

COMMODITY LOWS		COMMENTS
chart	COFFEE	Coffee is once again near a low. Looking at the 30-year chart, coffee has only reached 60 two other years since 1975. However, every time that coffee has a long term low, such as this one, it has a minor correction (up 20 to 40 points), then drops back down. A year or so later it skyrockets and in many cases climbs 2 to 5 times its low price within the next 6 months. With this commodity, patience is a virtue.
chart	CORN	Buy. Technical indicators signal a bullish move. Weather is hot and dry and is taking a toll on the corn belt. The latest crop report by the USDA was slightly bullish, with fewer acres planted to corn than previously anticipated.
chart	SOYBEANS	Watch. Currently in uptrend.
chart	OJ	Watch.
chart	COTTON	Watch. Buy if drops to 30-35 range.
chart	OATS	Watch. Buy if drops to $1.00 again.
chart	WHEAT	Watch.
chart	LUMBER	Watch. Extremely volatile right now. Possibly looks like it could fall in the short term, but I would hate to bet my money on it.
chart	LIVE CATTLE/ PORK BELLIES SPREAD	This spread has really widened in the last month (see chart below). The spread doesn't reach below -20 very often (8 times since 1977). It appears as though the spread doesn't bounce back narrower right away, possibly within about 3 months. Probably there isn't a dire need to jump right in this spread, but watch it for a little while and see what happens. Pork bellies are very near all time record highs, and live cattle are a little above average price, so you would sell pork bellies and buy live cattle in this case.
chart	10-YEAR T-NOTE/ 30-YEAR T-BOND SPREAD	If hits 0 again, Buy 10-Yr T-Note, Sell 30-Yr T-Bond because we know that it will not remain at 0. It has to be in positive ground due to economics.
chart	HEATING OIL/ UNLEADED GAS SPREAD	Well, someone is very wealthy now because of the spread. It has narrowed to -.0189 in the last two months from approximately -.3000. Doesn't sound like much? One contract yielded around $15,000 just in the months of May and June. They announced that OPEC has cut production again and are going to try to maintain this price for the rest of the summer, so maybe the spread will not widen in the negative direction again before winter. However, if it does, it will be another great opportunity.

COMMODITY HIGHS		COMMENTS
chart	PALLADIUM	It is currently on its way south, but it has a long way to go. It would be a good selling opportunity.
chart	FEEDER CATTLE	Sell. 92 is FC's high since 1979. It is highly unlikely it will climb higher than 92.
chart	PORK BELLIES	Sell. PB are near record highs with its current price of 94.7, only reaching this high 5 other times since 1970.
chart	EUROYEN	The Euroyen may be an excellent purchase. Currently the price of the Euroyen is 99.905. I further studied this commodity and discovered that the Euroyen is based on the Japanese Yen. In other words, you have to worry about the fluctuations in 2 commodities rather than just one. If the Euroyen price drops with a short contract, but meanwhile the Japanese Yen gets stronger compared with the dollar, it is still possible to lose money. Although the Euroyen isn't very volatile, it is still a riskier commodity than what meets the eye because of the Yen volatility. However, one positive aspect is that one contract only costs about $300 and each tick is about a $20 yield.
chart	10-YEAR T-NOTE	Watch