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Week ending June 8, 2001

IN SUMMARY STOCKS COMMODITIES
BUYS... GX, MOT Coffee, Euroyen
SELLS... small .COM stocks Palladium, Feeder Cattle
HOLDS... ATMS Heating Oil/ Unleaded Gas Spread
WATCH CLOSELY...   Cotton, Oats, Note/Bond Spread

STOCKS

NASDAQ- I expect this month to be fairly quiet in the markets as investors eagerly await the next earnings reports.  The nasdaq has formed an obvious channel.  I am not definite how long it will remain within those limits, but recognizing this channel helps to trade short term.  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.  

Bush got his 1.3 billion dollar tax cut passed by Congress, so that will definitely help the economy.  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.  Next, we may see the results in the manufacturing industry, and then it will have a trickle down effect into other industries.  In other words, we will not notice an instant change in the overall economy due to this tax cut, but it will affect the entire economy in time.  Perhaps it will take up to 15 years to notice the full effects of it, but what an impact it will have!!!   

 

 

 

 

 

ATMS- Tidel Tech. is probably forming another sideways trend right now.  It is a hold right now, but technically, if it breaks up out of the trend, buy the stock because the fundamental numbers look very appealing.  If it breaks below the support line, sell.  I have discovered that technical trading doesn't work very well with smaller companies, though.  Like I said earlier, the fundamentals look very promising, and I am anticipating the next earnings report to beat estimates, which will send the stock up to where it belongs.
MOT- Motorola is also contained in a channel currently, although it did break below it briefly.  I believe that these bottom and top lines to this channel are pretty heavy resistance and support lines for the stock, and it will take some big news such as an excellent earnings report to break through these lines.  When it finally does break through, which I anticipate to happen within the next 3 months, the next resistance line is approximately at 23, so if you buy now, you can almost double your money.  As a side note, technically, it appears as though the 50-day moving average is possibly beginning to turn back upward

 

 

 

 

 GX- Does this chart look familiar?  It looks very similar to Motorola.  Global Crossing is an excellent value right now.  As I predicted, it did climb for a while, but now it is taking a breather and has dipped down to give investors an opportunity to buy.  Like Motorola, GX has some resistance and support lines that have been hit several times, so I expect lines will be crossed when major news comes out, but not until then.  Again, similar to MOT, when lines are crossed, the next resistance line is at about 23, so once again you can almost double your money, probably in the next 3 months or so.

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 Watch
chart SOYBEANS Watch.  Possibly in uptrend and might reach $4.75, but I fear that is optimistic.
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 EUROYEN The Euroyen may be an excellent purchase.  Currently the price of the Euroyen is 99.915, after reaching 99.925 about a week ago, possibly indicating a peak.  Another thing to consider: the Japanese Yen is becoming stronger in the last couple months.  This possibly is demonstrating a stronger Japanese economy, which will cause the Euroyen to fall.  I look for the EY to drop within the next 3 months.  It is a great commodity to invest into because one contract only costs about $300, each tick is about a $20 yield, and it is not extremely volatile, so you will only lose or gain as much money as you allow.
chart LIVE CATTLE/ PORK BELLIES SPREAD Watch
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 -.1218 in the last month from approximately -.3000.  Doesn't sound like much?  One contract yielded around $7500 just in the month of May.  I will not be surprised if the spread widens once again before the summer is over, because gas is usually relatively higher in the summer, and heating oil is higher in the winter.  Keep your eyes peeled for another possible 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 if point 3 (arbitrary between value of point 1 and 2) is hit, but does NOT EXCEED point 1.  FC appear to be very topped, based on technical trading indicators.  
chart PORK BELLIES Watch.
chart 10-YEAR T-NOTE Watch