"Imagine if you will, a man alone in a darkened room...the twinkle of the computer screen showing day by day, his total wealth being wiped out. Yesterday it was Intel, the week before Lucent, next week maybe Apple or Cisco. The sweat on his brow mounts...Ah, good news at last: oil is dropping...but alas stocks don't react the way they should. They keep falling..."

No, this is not a scene from the 1960's thriller Twilight Zone, but very quickly it could be the year 2000's Air Zone.

You see, when stocks advance in a parabolic fashion -- a la perhaps Micron or Applied Materials in the current instance -- they invariably leave a "hole of fast trading" on the way up. I term this the "air zone" of the ascent, and it represents that distance above any noticeable chart work on the way up but below the first stopping point on the way down. As the chart below attempts to show, Applied Materials (AMAT) pictured on the right is quickly approaching its "air zone" in a relatively similar manner as gold approached its "air zone" back in 1980. Although some work at the top edge of the "air zone" may be anticipated, once broken, there is simply no support to point to for a considerable distance. In the case of AMAT, we think a price toward about $45 beckons with time.

Chart produced using Advanced GET End-of-Day

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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.