OT - NASDAQ down 132.30. The question is...

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...132.30 what? Shekels? Million dollar increments? Self esteem points? Happiness credits?

Inquiring techno-dweebs want to know.

Keep your...

-- eyes_open (best@wishes.2all), April 11, 2000


I am writing this on my laptop as I plummet past the 35th floor of 29 Wall St. Buying opportunities, buying opportunities, buyi...SPLATT!!

-- Lars (lars@indy.net), April 11, 2000.

Ah, Lars! I hope that you bounced...(you! not your checks!)

Eyes_Open, If you'll go to www.altavista.com and type in the question, "What is the NASDAQ?" You'll come up with answers appropriate to your level of knowledge. There is an excellent new website that explains the DOW and NASDAQ to beginners, but I unfortunately didn't bookmark it. I think you'll hit it via altavista. I'll post it later if I come across it again.

-- (kb8um8@yahoo.com), April 11, 2000.



-- (gohere@home.now), April 11, 2000.

Ok. I see. I have fooled you all in to thinking I have actual knowledge. I don't really. The question is far more basic than you are treating it. The question isn't "What is the NASDAQ". (But thanks for the links anyway. Good One.)

Let's try this.

The DOW is valued at X(11,287.08). The NASDAQ is valued at X (4,055.90). Solve for X.

Watch six and keep your...

-- eyes_open (best@wishes.2all), April 11, 2000.

I'm not sure I understand your question, but I'll take a shot at it.

The idea of an index such as the NASDAQ or the DJIA is to gauge how a fixed quantity of shares is performing over time. Example, suppose a brand new index were defined by taking the share price of each of 25 particular stocks at today's closing. Let's say doing that came to $800, and we decide to multiply our mix of shares by 1.25 to bring the index's initial value to 1000. Whenever we want to recalculate our index, we add up the per share price of each of those 25 stocks and multiply the result by 1.25. Since the initial value of the index was 1000, we can readily assess how that mix of stocks has performed subsequent to the index being established.

To keep an index accurate, adjustments need to be made occasionally. Example, if one of the stocks in our index should split two for one, then from that point forward we would need to double its per/share price in order to properly reflect that stock in our index.

If on the other hand, you want an index to be as misleading as possible, you keep changing the composition of stocks that make it up.

-- David L (bumpkin@dnet.net), April 11, 2000.

Which is why Roger Maris spent the rest of his life with an asterisk after his name.

-- Flint (flintc@mindspring.com), April 11, 2000.

Good one, Flint! I wonder how many asterisks the DJIA ought to have after its name.

-- David L (bumpkin@dnet.net), April 11, 2000.

So now David has kindly presented me with the basic formula for calculating an index. Thank you, David.

Now back to my question. Folks. Think "DUMB! EYES is DUMB!".

How many dollars does that 11,287.08 points of the DOW equal? How much value in dollars does that 132.30 represent? See? Simple. Just like me.

Watch six and keep your...

-- eyes_open (best@wishes.2all), April 11, 2000.

132 points is not that major since NASDAQ is now around 5000 points. I think it will be volitile till feds stop raising interest rates. The economy is still strong but does show sign of a slower growth, wich i think will help stabilize stock prices.

-- boo (boo@home.com), April 12, 2000.

eyes, on the off chance that you really MEAN the question, in your equation, X="Points".

"points" represents $ US

1 to 1 relationship, the number ends up being the AGAREGATE total of a specific number of shares (usually 1) of a set of stocks, which are selected in the dark of the moon, most likely with darts.


-- Chuck, a night driver (rienzoo@en.com), April 12, 2000.

Eyes: assuming you really mean the question you're asking, here's a reeeeally simple explanation. The various indices (Dow, Nasdaq, Russell 2000) arrive at their numbers based on the value of the stocks that make up those indices. The Nasdaq 100, for example, is made of 100 major Nasdaq stocks. The Dow relies on forty mostly "old economy" stocks -- pharmaceuticals, autos, consumer goods, etc. with Microsucks thrown in as a tip of the hat to the techs. Each index is a value derived from the stock prices of the companies involved, using arcane formulas, the arrangement of the stars on October 29, 1929, and Tarot cards. A Nasdaq value of, say, 4300 has no intrinsic dollar value -- it is a measurement of the aggregate value of all the stocks that make up that index, based on the aforesaid arcane formula. When the Nasdaq drops, that means that a majority of the stocks making up that index are falling in value -- not necessarily all. Intel, i.e., may increase in value as an individual stock while all its Naz compatriots are falling, and the index will reflect the majority effect.

To make things even more confusing, an index itself might not be an accurate measurement of the overall market. For example, the Dow rose steadily through 98 and 99, yet the overall market, as measured by the advance-decline line, actually lost value. A persuasive argument can be made that the stock market *as a whole* has been in bear mode since mid-98.

In other words, X equals nothing. The numbers stand by themselves as measurements of relative value, a yardstick. Hope this helps.

-- Cash (cash@andcarry.com), April 12, 2000.

boo -

Actually, the Nasdaq is around 3900 points as I write this. It should test 3650 (the low it hit and bounced off during Rollercoaster Tuesday) in the next week or so. Heck, the way the Comp's doing lately, it could test it by Friday. Nasty stuff, this...

-- DeeEmBee (macbeth1@pacbell.net), April 12, 2000.

Dee, quite so. I'm holding in cash right now waiting for the Big Shakeout. Maybe next fall we can ease back in again. Question: do you think the market will fall in stages, a la 1929-32, where the eager beavers who bought back in after the initial crash got wiped out, or is the market so much quicker moving now that the the crash and burn will only take a few weeks or months?

-- Cash (cash@andcarry.com), April 12, 2000.


You had the call on Motorola right on the button. It's interesting how one stock can apparently change investor perception on an entire market segment.

As you say, the NASDAQ is now at about what it would have closed at last Tuesday without the big rebound. Strange how that was such a big deal and the slow slide is not. One would think, though, that if people thought that the NASDAQ had some bargains last Tuesday at 3800 that those same people won't start buying today. If the NASDAQ doesn't close up, there could be some real problems ahead.

-- Jim Cooke (JJCooke@yahoo.com), April 12, 2000.

Cash -

It seems more likely that the Nasdaq will grind its way downward to more supportable valuations in 1-2% increments. Big downticks have tended to bring in big support from fund managers, while slow downtrends allow them to change positions rather than defend. The "grinder" also quietly eliminates margin players, squeezing out cash and reducing upside potential. Market is certainly more volatile and investors have more info and tools, but unless something truly sets off a stampede (such as news that seems to eliminate the current "safe haven" of Old Economy stocks without also providing confidence in tech), we're looking at a classic bear market on the Comp.

That's my most hopeful case. Bubbles tend to pop, unfortunately. I'm hoping for better.

3000 was the breakout last October. We could easily see the Comp test that by late May, and then, who knows? That's a 40% correction from the 5000 high and a corresponding destruction of wealth. Gonna put a bit of a crimp in the yacht biz.

-- DeeEmBee (macbeth1@pacbell.net), April 12, 2000.

Both TheStreet.com and Silicon Investor had MOT on their radar in a big way, so I was just "standing on their shoulders" and looking where they pointed. Now I wonder if Intel will suffer the same fate? They beat the street "by a penny" (*gasp*) last time and they used investment income to do it. Unless they're magicians, the Comp's slide has to have hurt them. Stay tuned.

Frankly, I really don't think MOT changed everyone's minds; it just confirmed concerns in a few more. We've had a growing drumbeat of warnings about tech stocks (biotech, dotcoms, semis, the whole crew) since January and it's really hit a crescendo in the past few weeks. Rollercoaster Tuesday put a bit of a knot in more than a few stomachs, and now they're even more queasy. Microsoft got smacked for bullying tactics. PC sales forecasts were downgraded today, hurting boxmakers, semis, software, and almost everyone else.

We have daily headlines like "drubbing.com" and "tech continue downward slide" and such, which just ups the volume.

Lots of money has apparently gone to the sidelines to wait this out. Nasdaq is below 3900 and dropping on moderate volume (1.4 billion) as I write this. A/D line is almost 1:3, which is truly awful.

Tech giveth, and tech taketh away...

-- DeeEmBee (macbeth1@pacbell.net), April 12, 2000.

Day ended worse than I would have thought. Nazz fell out of bed in the last hour. Very, very ugly...

A couple of postings from the "John Pitera's Market Laboratory" thread over at Silicon Investor (usually a rather gleeful bunch):


To: Chip McVickar who wrote (973)

From: GROUND ZERO Wednesday, Apr 12, 2000 4:19 PM ET Reply 975 of 976

Yep, I think the party's over..... for a while, at least.....



To: GROUND ZERO who wrote (971)

From: LONGonFIBER Wednesday, Apr 12, 2000 4:22 PM ET Reply 976 of 976

Technology is dead, and there is no god.

On a serious note, seeing a re-test of last Tuesday's lows is to be expected.



It appears that some of the true believers are now having a few doubts about the Great God Tech. We should see a bit of a bounce tomorrow, (still some dip-buyers out there, I suspect), but then the steady downtrend will likely resume. Expect a big ol' bounce when we first re-test 3650, since a lot of folks will have set that up as a buy opportunity.

Now if a big hedge fund gets in trouble (cf. Foxhound last week), the drop will be even more substantial, but again, the fund managers are poised to defend against those, at least for a time. They will fight a holding action, but will not press an advantage. Like most professionals, the funds have no favorites or emotional ties to any given stocks; they just want to (a) be in the black and looking good each quarter and (b) avoid massive redemptions.

-- DeeEmBee (macbeth1@pacbell.net), April 12, 2000.


Yep, I was more than a little suprised not see a bounce in the NAS toward the end. The sudden drop in the Dow is even more unsettling. It looks like there was selling into the Dow to pay for margin calls either already happening or those that might happen tomorrow. We'll see tomorrow if 3650 is really a support level or not.

-- Jim Cooke (JJCooke@yahoo.com), April 12, 2000.


So the winner of this essay contest is....

Cash! Who solved for X with the following:

X=(CNBS/volume)+(NASDAQ*Happy_Faces)/(Y*BGHS) [Where Y=Total US consumer debt and BGHS=BIll Gates Hat Size. ]

Thanks Cash.

The thread has continued on to much more interesting feeding grounds from there, so I relinquish ownership of it.

Watch six and keep your...

-- eyes_open (best@wishes.2all), April 12, 2000.

Looks like the Nazz is trying to recover today. Heck of a drop at the open, then some dip-buying, then some serious rally-selling, and now it's making its way back up (+2.5% as I write this.) Hey, after a decline of over 15% in the past ten days, there has to be some kind of "snapback buying" sometime.

A note of caution: this rise is paper-thin. As of noon Eastern, the internals for the Nasdaq were 1,599 advancers, 2,197 decliners, 888 million shares; 9 new highs, 151 new lows.

That look like a broad rally to you? Me, neither. A big jump when the Advance/Decline line is negative (8:11 in this case) and with that many new lows to new highs would seem to indicate that it's only a few big caps going up and most everything else is still losing ground.

-- DeeEmBee (macbeth1@pacbell.net), April 13, 2000.

Now THAT was ugly. Up until 12:45PM, today looked like a nice little snapback rally for the Nazz. Almost a 4% gain on the day, which would have provided some breathing room (and liquidity) to many a battered trader/investor/speculator.

And then it all fell apart. Stairstep decline for the next hour down to just +2% for the day. Little bounce, then 2PM arrived and so did what I can only assume was one hellacious set of margin calls. The Comp dropped 2.5% in an hour, had the proverbial "dead cat bounce" up to +1%, and then fell a full 3% in the last 30 minutes of trading to close very near to that 3650 support level.

Momentum has really and truly reversed; "buy the dip" is changing to "sell the rally". The Nasdaq can't even hang on to decent gains anymore. Anyone who bought that dip this morning got their head handed to them. Not pretty...

-- DeeEmBee (macbeth1@pacbell.net), April 13, 2000.

Dee, the morning rally was too thin to hold with that A/D line (says the guy with 20-20 hindsight) without some major investor confidence to prop it up. Was it you who said ignore everything before 2 p.m. and act on what happens after 2? BTW, where do you see the 401k and mutual fund money going right now? It's still a big chunk of change flowing into the market on a regular schedule that has to find a home somewhere. Bonds? T-bills while the managers are in wait mode? Is Joe Sixpack ready to go back to 6-9 percent earnings a year after the 35-40 percent returns of the recent past? Not much choice, I guess, but it means a lot of consumer spending is going to hit the pause button, IMO.

-- Cash (cash@andcarry.com), April 13, 2000.

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