The Chart du Jour

The DJIA Will Not Be the Savior Here

April 4, 2000

By, Barclay T. Leib

We do not know what mutual funds like Janus are doing in the current environment given how lopsided and concentrated their tech holdings are. Perhaps the current wild divergence between the DJIA and the NASDAQ is some such fund manager desperately trying to do a reallocation, and being front-run by a courteous investment bank.

What we do know is that on a standalone basis, the current DJIA rally should shortly peter out. 11,390 should more or less do it based on the current Fibonacci rhythm of the advance. With an inverted yield curve, a massive trade deficit, and yet a strong dollar -- this is not exactly a great environment for corporate America to thrive. Behind us are most of the gains from restructuring and downsizing. Behind us are a whole host of accounting games and debt-financed stock buybacks. There is not too much more the average business can pull out of the hat to obscure the reality that corporate profits are under pressure.

From an Elliott perspective, we think the DJIA should finish an A of a II wave shortly. We think the Nasdaq may be entering a wave 3 of I down. The combination is not likely to be pretty. As the Nasdaq heads to at least 3,500 and possibly the 2,900 region longer term, the CNBC pundits and Wall Street analysts may keep trying to put a positive spin on current developments, but we feel it will ultimetely fall on deaf ears. When bonds started dropping in February 1994, few analysts really believed in the move at first. The fixed income buy recommendations continued to spew forth, but prices just kept moving lower. We'd look for something similar in the current environment. After all it's the kid's college savings at stake for most families. If these savings appear in any real jeopardy we think all those so-called "long term" investors will simply pull the plug. The Dow will not be a good safe-haven savior.

Chart produced using GET End-of-Day

Please support Sand Spring Advisors and purchase one of our more in-depth articles below.

What our Subscription Only Articles Contain
We recently finished two in-depth articles on the equity world, one looking at some of the psychological signs of a mania entitled "A Certain Fixation," and the other focusing specifically on the Nasdaq. The former article discusses two specific equity situations, while the latter article examines the Elliott wave pattern of the Nasdaq's Price-Earnings Ratio since 1995, as well as various analog pattern matches involving the Nasdaq. "Nasdaq Crash and First Stopping Point" also looks at mutual fund cash levels, mutual fund positioning, and changes in the monetary base. It sketches out a possible path for the Nasdaq that may prove a valuable "roadmap" for trading over the balance of the year. Both articles offer some powerful evidence that a crash scenario is most certainly possible and perhaps closer than most realize. The articles are available for purchase below via credit card at $25 apiece. One may also subscribe on a quarterly basis to ALL articles past and present for just $65.

How Your Articles Are Delivered
Upon the processing of your credit card or the receipt of a personal check, Sand Spring will e-mail you the articles requested as a Word attachment, and also provide you with a WWW address and password to view the article on the web without using Word should you so desire. Confirmation of your order will be immediate, and the actual article will follow by e-mail typically within a few hours and in all cases before the opening of NYSE trading on the following day.>

Ordering by Credit Card:
Our shopping cart is designed for both physical and subscription products, so do not be confused too much when it asks you for a shipping address. A correct address is important only for credit card authorization purposes. Your e-mail information is the most important piece of information to us for proper delivery of your article(s).

Disclosure Statement

Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.

Order multiple articles at the same time, and get a 20% discount on each.

  • E-Commerce: A Paired Approach, April 2000...Available for Purchase at $25

  • A Certain Fixation, March 2000...Available for Purchase at $25

  • Nasdaq Crash and Stopping Point?...February, 2000...Available for Purchase at $25

  • Subscribe to on a quarterly basis and receive the above articles, and all that follow them (a minimum of 4 per quarter), plus all Chart du Jours (some of which would otherwise be pay-per-view) for just $65.

    If you order by credit card, your credit card will be billed as "Sand Spring Advisors LLC"

    Should you have any ordering problems, please contact us at
    973-829-1962 or by email at the address below:

    Take me back to the Sand Spring Home Page

    Comments or Problems

    Thank you for visiting Sand Spring Advisors LLC, Inc. We hope to hear from you again soon. For more information on Sand Spring Advisors actual programs, services, or to request a copy of a Disclosure Document, please phone us at 973 829 1962, FAX your request to 973 829 1962, or e-mail us at

    Corporate Office:
    10 Jenks Road,
    Morristown, NJ 07960
    Phone: 973 829 1962
    Facsimile: 973 829 1962

    Best Experienced with
    Microsoft Internet Explorer
    Click here to start.

    The material located on this website is also the copyrighted work of Sand Spring Advisors LLC. No party may copy, distribute or prepare derivative works based on this material in any manner without the expressed permission of Sand Spring Advisors LLC

    This page and all contents are Copyright 2000 by Sand Spring Advisors, LLC, Morristown, NJ