A few days ago we got an e-mail from a reader all hot to sell short a variety of different stocks. One of them included Motorola, a stock we have not recently commented on in these pages.

For that investor and others, we want to start offering a bit of caution. The meltdown in telecom may not be quite over, but it's getting pretty late in the game to establish new shorts right here. Note on the monthly chart below of Motorola, that we are now in the range of a 61.8% retracement of the entire 1990-2000 upmove in Motorola. Short term overshoots to the downside are likely, but overall, the $22-$26 region is NOT a high probability point to add or establish shorts -- not in Motorola at least.

Chart produced using Advanced GET End-of-Day

Unlike so many companies out there, Motorola and Lucent are at least real companies with real earnings. No, they are not going to grow at the previously perceived 25% a year, but no, they are not going to go away or collapse. At this point in the game, we'd be more worried about all the other companies out there that still sport several billion dollar capitalizations, have tons of broken convertible debt outstanding, but may or may not survive to service this debt longer term. We'd also be worried about the financial repercussions of the people who own all this junk-like paper -- i.e. the financial sector.

For further thoughts on this subject, we direct subscribers to re-read our September article "Where the Excess Lies."

For immediate web-based access to this Oct 5th-dated cycle date analysis, please support Sand Spring Advisors and purchase a quarterly subscription below. Our latest work will be accessible on the final page of the order process. A user-id and password for web access to all past and future acrticles will follow by e-mail.

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.