Sand Spring Advisors LLC

Returning to Our Roadmap

August 7, 2002

by, Barclay T. Leib

We apologize for having been quiet for the past few days, but despite all the wild equity index goings and comings, we find little new to say from previously espoused bullishness for an irregular counter-trend rally into November. We do not know what the headlines of the coming months will be, but we do think they will temporarily look better than todays' headlines. It would not even surprise us if Osama Bin Laden is suddenly found.

We say all of this having spent the last several days reviewing many of's earlier articles and postings. Many moons ago, several subscribers asked us to compile a more formal "track record" of our espoused ideas, and how they panned out, and we are indeed endeavoring to construct such a table at the current time. Clear however in our initial perusal of 1999-2001 articles is that we have had a great tendancy to be early, and while our Fibonacci band targeting technique occasionally works to a "T", more often targets can be overshot for a week or two -- seemingly before the magnet of having gone beyond a Fibonacci resistance zone reasserts itself.

So it would seem our recent July bullishness was premature and our targets overshot once again. In one of our first articles written on back on February 29, 2000, entitled "Nasdaq Crash and First Downside Stopping Point," (released today for the first time to the public in the Earlier Articles section of the website) we were pointing toward a 4391 upside target high on the Nasdaq 100 followed by a collapse to a first target range of 2,726-2,793. The eventual spike high on the Nasdaq 100 was actually 4,882, but with a closing monthly high of only 4,457. When the inevitable reversal and sharp initial drop came, the first downside low was at 2,902 -- a bit above our espoused "first stopping point." So were we off in our prognostications by a bit? Yes, most certainly. But did we have the right general instinct and trading strategy? Yes, again, and versus the closing monthly high, our call really wasn't that bad given the subsequent 35% decline experienced by the Nasdaq 100 in just 2 months -- a move few could have even fathomed occuring at the time. It is simply hard upon occasion to guage an emotional throwover beyond a Fib target, and we inevitably seem to be early pointing toward brewing trend changes.

In that February 2000 article, we compared the Nasdaq 100 chart to a previous 1980 chart of the price of gold. Both appeared as parabolic bubbles, and we proposed the gold chart as a potentially useful roadmap. We have now updated our comparison below, and used a minor bit of interpretive labelling of "months up" and "months down." We have not changed however the fact that gold topped in January 1980 and made its first bottom of any magnitude 29 months later in June 1982. In the current instance, the Nasdaq 100 topped in March 2000, and 29-months later is this month: August 2002. Any normal individual can see the great similarility in structure between the decline of these two markets.

From here, we must insist that the Nasdaq 100 is overdue for a sharp bounce period into November that looks like it could then extend into a secondary marginal new February high. Measured from November 2002, however, we generally see 2.15 years of sloshy down markets beyond that high until early January 2005. It will be during this latter period, not now, that equity volatility will truly start to diminish and CNBC will be losing viewer eyeballs right and left.

Chart constructed using Advanced GET End-of-Day

It's truly time for equity shorts to stand aside, and focus on other things. Bearish yen (bullish the dollar); bearish crude oil; and temporarily positive equities (as much as it disturbs our longer-term bearish proclivities) must be the way we remain.

Non-subscribers are invited to sign up for our premium level of service below, and gain immediate access to our July 8th commentary entitled "Biotech Bottom," as well as our July 16th subscriber-only update. Access to earlier analysis, as detailed below, is also provided.

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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.

  • In Search of Survivable Themes...May, 2002...
    Within this article we explore what we consider survivable investment themes in today's markets, and two small-cap stocks from down under that may fit this bill. ...
    Available for Purchase at $35. THIS INCLUDES ALL ARTICLES BELOW FOR FREE.

    • Pension Asset & Liability Blues...March 2002...
      Within this article we explore much misunderstood and underestimated ERISA and FAS accounting that could cause a two-decade long malaise in corporate profitability. We also update many of our previously espoused long and short views.

    • Complicated Moves...February 2002...
      A temporarily bullish look at the DJIA, written in late February 2002, together with a discussion of several value stocks that we like within this market.

    • Zig-Zag Markets, and What Will Go Thud that Hasn't Already...January 2002...
      In this article, we discuss the path we expect into our important November 2002 cycle date, and several specific short selling opportunities in industries as far afield as trucks to bread...
      Available for FREE with purchase above.

    • 2002: A Golden Year? ...December 2001...
      In this article, we explore the cyclical rhythm of the gold and gold equity market, and what it portends for next year. Several stock-specific charts and fundamentals are examined...
      Available for FREE with purchase above.

    • Kasriel to Greenspan: Farewell Soon? ...November 2001...
      In this article, across 17 chart-filled pages, Northern Trust chief economist Paul Kasriel scathingly exposes many of the flaws of Alan Greenspan's Fed, and how Greenspan may actually have set the economy up for the 2000 Tech-Wreck...
      Available for FREE with purchase above.

    • The Cycle of War & The Agony of Debt...October 2001...
      In this article, across 12 chart-filled pages, we explore how relative geo-political calm can suddenly digress to a temper-filled period of war, as well as current fundamental pressures on the U.S. economy from excessive corporate and household debt burdens...
      Available for FREE with purchase above.

    • Perspectives on Where We Are, and Why ISDA Documentation Will Not Prevent Derivatives Accidents, September 2001...
      An update on prior views and prognostications, as well as a discussion of a new market sector now potentially coming to life on the long side. We also examine how easy it might be for a major bank such as JP Morgan to someday suffer a serious derivatives accident
      Available for FREE with purchase above.

    • Long_Term Equity, Gold, and K-Wave Cycle Thoughts, August 2001...
      A long-term look at our own cycle theories and how they may potentially interact with the famous Kondratieff cycle
      Available for FREE with purchase above.

    • The Importance of June 2nd, May, 2001...
      A cyclical look at the 8.6 month cycle at work in the current equity market, and one financial stock with a nasty looking "pattern match" to a historical chart pattern
      Available for FREE with purchase above.

    • Expert Short Picks, May, 2001...
      A discussion of the fundamental thoughts of short selling hedge fund manager James Chanos within a technical framework
      Available for FREE with purchase above.

    • Four Themes for 2001 & Beyond, April, 2001...
      A variety of issues we see growing in importance over the year 2001, with a particular emphasis on certain issues within the U.S. food chain.
      Available for FREE with purchase above.

    • Measuring Financial Time: The Magic of Pi, February 28, 2001...
      Two centuries of financial history within a cyclical and mathematical framework, including an analog roadmap for the NASDAQ to potentially follow in 2001.
      Available for FREE with purchase above.

    • Portfolio from Hell, January 20, 2001...
      a close critique of a major mutual fund manager and a technical look at the individual equity components of their go-go portfolio.
      Available for FREE with purchase above.

    • Positive for Now, January 4, 2001...
      If the DJIA were to vault to new highs, where would the imbedded Fibonacci rhythm of its price action lead?
      Available for FREE with purchase above.

    • Time to Start Accumulating the Golds? - Dec. 2000...
      We take a close look at four gold-related stocks that we favor.
      Available for FREE with purchase above.

    • Don't Look for a Bottom Until..., Nov. 2000...
      An update of some Fibonacci thoughts on eight selected stocks.
      Available for FREE with purchase above.

    • Diamonds in the Sky, Oct. 2000...
      A close technical look at the Dow Jones Industrial Average and the implications of the formation it has made.
      Available for FREE with purchase above.

    • The Signficance of Oct 27- Nov 1, Oct. 2000...
      This analysis did not pan out quite as we expected, but is a good example of how we examine the world in Fibonacci terms.
      Available for FREE with purchase above.

    • M&A Currency Imbalances, Oct. 2000...
      An interview with a well known fund manager and economic thinker, we explore some of the macro-imabalnces as they exist in the world today.
      Available for FREE with purchase above.

    • Failed Accounting Standards, Mmm Mmm Good, and Where (if at all) to Invest in Bandwidth, July 2000...
      A three-part article outlining some of the balance sheet fun and games of today's financial world, one old-world stock, as well as our vision of the potential fallout and opportunities in the bandwidth market
      Available for FREE with purchase above.

    • Cyclical Commodity Turns, May 2000...
      As we entered the summer-time harvest season, this was a cyclical look at the world of wheat, corn, gold, and the CRB. Much of the analysis proved premature, but it still leaves us with some long-term cyclical dates to now keep in mind.
      Available for FREE with purchase above.

    • E-Commerce: A Paired Approach, April 2000...
      This is a more fundamentally oriented article examing the likely winners and losers as e-commerce increasingly invades the transactional side of Wall Street.
      Available for FREE with purchase above.

    • Nasdaq Crash and Stopping Point?...February, 2000...
      This 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. It 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.
      Available for FREE with the purchase of article above.

  • Subscribe to on a quarterly basis and receive all of the the above articles, and all that follow them (a minimum of 3 more per quarter), plus all Chart du Jours (some of which would otherwise be pay-per-view) for just $65. THIS INCLUDES OUR June 3rd. UPDATE -- "The Coincidence of Time" -- as well as our FULL ARTICLE of July 8th entitled "Biotech Bottom" and July 16th update to it. Within this first update, we touch on three separate approaches to the market that all pointed toward a violent June 2002 market low. In the latter article, we discuss the potential for a large tech and Biotech market bounce into early November 2002, and potential plays within the Biotech sector that may benefit from such a rally.

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