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January 2003

January 28, 2003

NBA Travesty - The L. A. Lakers Will Not Make the Playoffs
The Lakers are playing just like a sub-.500 team
posted by Rick Gagliano

With the NBA season at the midway point, it is becoming crystal clear that the Los Angeles Lakers have no interest in defending their three straight NBA titles.

The Lakers' record stands at 19-23, currently good enough to be tied for 10th place in the Western Conference standings. The Lakers are tied with Seattle, a team that has more chemistry problems than oil and water. It's embarrassing, or at least should be to the - ahem - world champions.

That the Lakers have not performed up to the standards of a defending champion is an understatement. Early in the season their poor start was attributed to the absence of Shaquille O'Neal, who was missing the action as he rehabbed following a foot operation.

Conceivably, Shaq could have had the operation earlier in the off-season and had been ready for the start of the NBA season, maybe he could have played in a few exhibition games - you know, get kind of tuned up for the regular season. But Shaq chose to delay the operation and miss the first month of the season. It's emblematic of the kind of numb skull thinking that is dooming the Lakers to mediocrity this season, as they continue to sleepwalk though games, winning some on sheer talent, but losing more than a share of those that they could have, and normally would have won.

Last week was typical of the kind of play we've come to expect from the Lakers this season - lousy. They began by dropping a highly-publicized game in Houston featuring Yao Ming vs. Shaq. The match-up of big men was exciting, but the real game was in the backcourt as Houston's Cutino Mobley and Steve Francis completely overwhelmed Kobe Bryant and Derek Fisher. For the record, the Houston backcourt duo scored 73 points and dished 15 assists. The Lakers' backcourt numbers were 36 and 11. Outplayed - by a wide margin.

Three days later, the Lakers strolled through a 96-92 home win over the Clippers - a game they were expected to win by 8 or points, but instead were either tied or losing in the last three minutes. Only some last minute heroics by Kobe saved them from a loss.

However, the Lackadaisical Lakers managed to outdo that performance by losing on Wednesday night to the Golden State Warriors. At home! The win allowed the Warriors to move into a tie in the standings with the Lakers, and two days later the Warriors found them a half-game up on Los Losers, as the "champs" lost an important home tilt to last year's finals opponent, the New Jersey Nets.

Things are about to get worse for the Lakers. On the 29th they play at Phoenix and on the 31st, at Sacramento. They may be able to eke out a win over the Suns, but winning in Sacramento is nearly an impossibility. The Lakers could end January with a .500 record. Considering the start they had, they'll have to do better than that to make the playoffs.

Right now, the Lakers are 4.5 games out of the last playoff spot, currently in the possession of Houston. And the Lakers have shown that they cannot beat Houston consistently. The Lakers haven't proven able to beat anybody, nonetheless consistently. They will have to find a suitable victim to replace in the West standings and that's not going to be an easy task. Maybe the Lakers think they can play 5.5 games better than Utah down the stretch. Or that Minnesota will oblige by stumbling late. Maybe the Phoenix Suns will trade away a few of their stars and let the Lakers into the playoffs. After all, they belong, don't they?

The truth is that the Lakers don't belong in the playoffs. Not with a record of 19-23. Not in the rugged western Conference. And certainly not playing with disdain for the fundamentals, no defense and even less desire.

The Lakers can do the NBA and everyone a huge favor by dropping six of their next eight games and putting to rest the notion that they can turn "it" on and make the playoffs. Sorry, L. A. guys, it just doesn't work that way. You still have to play the regular season - all 82 games - and you have to win more than half of them to make the playoffs, usually quite a few more than half. At this point in time, the Lakers are not even a .500 team. If they can even up their record with 20 games left in the season, they may have a shot, but it will still be a long one. In those last 20 games they have to play the likes of Detroit, Minnesota, Boston, San Antonio, Houston, and they get Sacramento and Dallas twice. Good luck.

The Lakers will not make the playoffs this season. They have shown already that they don't want to be there and they're going to spend the rest of the season proving that they aren't even good enough. Sad, but all too true.


January 23, 2003

Fearless Rick's Super Bowl Picks - January 26, 2003
Oakland Raiders -4 (43 1/2) Tampa Bay Buccaneers
posted by Rick Gagliano

Oakland Raiders -4 (43 1/2) Tampa Bay Buccaneers

The differences between the two teams vying for the annual pro football honor of champion are vast. The Raiders win with a disciplined, non-stop passing game engineered by veterans while Tampa Bay wins by destroying and eliminating the passing game of their opponents. The Raiders are more finesse than brute force. The Bucs are mean and brutal. And while the Raiders have a tendency to score many more points than they need to win, Tampa Bay usually wins by limiting the score of their opponents.

There couldn't be two teams with less in common if you had hand picked them, but there are some startling similarities. Both teams - and this is the real wild card - have been coached by Tampa Bay's Jon Gruden. Gruden left Oakland for a lucrative deal with the Bucs after last season so he knows how the Oakland offense and defense works better than almost anybody - maybe better even than current Raider coach Bill Callahan. How much that aspect will play into the overall scheme of things is a mystery. One would be prudent to chalk up a slight edge for Tampa Bay in the intangibles, however.

Offensively, the Raiders were #1 over the regular season; ditto, defensive prowess for the Bucs - top notch. Is there an edge there at all? Maybe. The Raider's two possession receivers, Jerry Rice and Tim Brown, are 40 and 36 years old, respectively. They will be matching up against Ronde Barber, 27; Brian Kelly, 27; Dexter Jackson, 25 and John Lynch, 31. Experience vs. youth? Maybe. But Lynch has 10 years experience, Kelly and Barber 5 each, and Jackson 4. After 4 or 5 years in the league, one is established. These matchups begin t look like age vs. youth, and if it plays out that way it could prove disastrous to the Raiders.

Neither team offers much in the way of a running game. The Raiders are probably a little better in that regard, in that they have Charlie Garner, Tyrone Wheatley and Zack Crockett, of whom Garner will get most of the carries. But establishing a ground attack is not in the Raiders' best interests, usually. They are primarily a passing team. For Tampa Bay, they do have the ultimate battering ram, Mike Alstott who possesses great power and balance and can run between the tackles. Michael Pittman has gotten most of the carries this season, but the Bucs also aren't very proficient in the ground game. Garner averaged 5.3 yards per carry - impressive - while the Bucs' backs clock in around 3.6 ypc. Not very good. Put the Raiders down for a slight edge in the running game.

You would expect the Raiders to have a large edge in the passing game, and in some respects they do. Gannon threw for 4689 yards in the regular season, completing 67.6% and compiling a QB rating of 97.3. He threw 26 TD passes against only 10 interceptions. Brad Johnson, the Tampa Bay QB, had an exceptional season as well, completing 62.5% of his passes for 3049 yards, with 22 TD passes and a league low 6 interceptions. Johnson racked up a QB rating of 92.9. Very respectable. Of course, the Raiders throw much more often - 167 more pass attempts to be exact - so they gain more yardage that way than the Bucs. But, of all the receivers in this game, it is a Buccaneer, Keyshawn Johnson, who leads all in yardage per catch at 14.3. Oakland's two Jerrys, Porter and Rice, came in at 13.5 and 13.2. Both teams run a West coast style offense, with plenty of slants, outs and short passes. The Raiders will generally make big plays after the catch, while the Bucs tend to grind out first downs, though Johnson, Keenan McCardell and possibly the most dangerous receiver, Joe Jurevicius, can break big ones. So give the Raiders the edge in the passing game, though not as big a one as one would expect.

On defense, the Bucs have an edge overall. Both teams recorded 43 sacks during the regular season, with Tampa Bay's Simeon Rice leading the charge with 15.5. Rod Coleman, an outside linebacker, led the Raiders with 11 sacks, so any pressure on Johnson will probably be the result of blitzes and we all saw what Johnson did to Philadelphia's secondary when they blitzed last week. It was torched repeatedly and Philly had one of the best pass defenses in the league. Gannon will need to stay away from Rice and of course, Warren Sapp, who clogs the middle, but who can also storm the QB if not handled. Oakland's offensive line is one of the best in the game, so the game may truly be won in the trenches. On the other side of the ball, Tampa Bay's O-line has improved and is rock solid now, while Oakland doesn't put on much of a pass rush. The Raiders will have to blitz if they want to get to Johnson.

Both teams have adequate linebacking units, led by experienced outside backers - Bill Romanowski for the Raiders and Derrick Brooks for the Bucs. Brooks has an edge over Romo, as he is younger, faster and stronger.

In the secondary, the Bucs have proven to be lights out, yielding a league-low 155 yards per game passing. The Raiders allow 220 per game. This is the biggest edge in the game. The Raiders must pass in order to win, which plays into Tampa Bay's strength.

The kicking game is virtually even. Both Sebastian Janikowski and Martin Gramatica are solid from 40 yards in. Both struggled from 40-49 - Gramatica was 6 of 10, Janikowsi 7 of 12 from that distance. And on specials teams, the Raiders and Bucs are pretty average. Neither team will kill you on kickoff or punt returns and both defend them well.

So, let's total it up. Raiders have the edge in rushing and passing. The Bucs get the edge on the offensive line, linebacking and a huge edge in the secondary. The Bucs also get that special nod for intangibles. Looks like Tampa Bay should be the favorite, but they're not. Why? Because the linemakers in Vegas know there are millions of Raider fans who would bet them if they were 7 point favorites. The line on this game opened at Oakland -5, and moved down to -3 1/2 on Wednesday before settling in at -4. The early money has flowed toward Tampa Bay.

My conclusion is that you'd have to be out of your mind to give Tampa Bay points in this game. Making them the underdog was purely the work of Vegas oddsmakers, not statistical comparison. Teams with superior defenses almost always win big games because they have less opportunity to make mistakes. They play their game and they defeat the schemes of the offense. The annals of Super Bowl history are rife with examples, the most recent being the Baltimore Ravens, who routed the Giants without a quality starting quarterback. Last year - my, my how short our memories are - the Rams - a team with a supposedly unstoppable offense - were completely outclassed and shut down by the defense of the New England Patriots. As much as I hate to repeat a time-tested old adage, this one is true - defense wins championships. And this time it will be no different. Look for the Bucs to roll it up to the tune of 27-14.

Some numbers to ponder.

The Bucs scored 21 points or more in only 6 games in 2001, but did it 9 times in 2002.

The Raiders held opponents to 17 points or less 8 times in 2001, only 7 times in 2002.

The Bucs held opponents to 17 points or less 10 times in 2001, 13 times in 2002.

The Raiders scored 21 points or more 12 times in 2001, 14 times in 2002.

Conclusion: The Raiders offense is a little better than last year, their defense is about the same, while the Bucs' offense is improved and their defense better than ever.

Common opponents this season: Pittsburgh: Oakland won on the road, 30-17; Tampa Bay lost at home, 17-7; St. Louis: Oakland lost on the road 28-13; Tampa Bay won at home 26-14; San Francisco: Oakland lost at home, 23-20 in OT; Tampa Bay won at home, 31-6.

Current streaks: Oakland has won 9 of last 10; Tampa Bay has won 9 of last 11.

In the playoffs, Tampa Bay has allowed on one offensive touchdown while outscoring the opposition 58-16. Oakland has allowed four offensive touchdowns while outscoring the opposition 71-34. Tampa Bay's average margin of victory in their two playoff games was 21 points, Oakland's is 18.5.


January 15, 2003

Fearless Rick's Football Picks for January 19, 2003
NFL Conference Championships
posted by Rick Gagliano

NFL Playoffs, Sunday, January 19

Instead of throwing around stats and figures in the two conference championships, let's just focus on players who are difference makers.

We've all heard the terms before - "impact player, instant offense, difference maker" - well, I actually like the term "difference maker" because it does have some meaning. Certain players are able to make differences in games and the preponderance of them on one side usually leads to wins. Take Michael Vick for example. He's a difference maker and he did well against Green Bay, because the Green Bay defense didn't have a difference maker of their own. However, against the Eagles, he was neutralized by difference makers in the Philadelphia secondary - notably Brian Dawkins (who nearly knocked Vick into next season) - and superseded by the ultimate difference maker, Donovan McNabb.

In this week's games, the players mentioned below will make a difference and their input could be as much as 3, 7 or 14 points or more. Some will be neutralized by a counterpart on the other side of the ball, some won't. Here's how I break it down.

at Philadelphia -4 (34) Tampa Bay - Both teams have a number of difference makers, but Philadelphia holds the edge because their big gun is McNabb at the all-important quarterback spot. For Tampa Bay, chalk up points on offense for Keyshawn Johnson and Mike Alstott. On defense, they have a few more, especially Warren Sapp, Simeon Rice, cornerbacks Ronde Barber and Brian Kelly, and linebacker Derrick Brooks. For Philadelphia, you have, on offense, McNabb, RB Brian Westbrook, and receivers Todd Pinkston and James Thrash. On defense, the Eagles also load up with DBs Troy Vincent, Bobby Taylor and safety Brian Dawkins. Linebacker Hugh Douglas also qualifies. The kickers, Akers and Gramatica, normally would qualify, but in this case cancel each other out.

Taking the case further out, here's how it goes. The defensive difference-making of the Tampa Bay d-line is going to be neutralized by the overall excellence of Philly's front five. That leaves the Eagles' two dangerous receivers up against Tampa's solid corners. Brooks can help out in short situations, but don't be surprised to see Philly go long if either Pinkston or Thrash get single coverage. Also, Philly's most dangerous weapon, McNabb, can run or throw to other receivers or, the ultimate nightmare for Tampa Bay, explosive Brian Westbrook, who may turn out to be the game's true difference maker because there's no way to account for him all the time on every play. He'll probably see more action this week than at any other time this season.

On the offensive end, Tampa Bay just doesn't have enough weapons. Sure, Alstott and Johnson knifed through a porous San Fran defense last week, but it won't happen here. Philly does need to muster a good pass rush to speed up Brad Johnson and force errors in the passing game. If they can do that, good night! Overall, the Bucs, who have been plagued with an underperforming offense for years, still suffers from that fatal potion. The eagles win this one in a big way.

at Oakland -7 1/2 (47) Tennessee - The difference makers for the Raiders are almost too many to count but let's start with the defense: Both Woodsons in the secondary, Rod and Charles, make the grade. Bill Romanowski in the middle and Trace Armstrong (now on IR) and Sam Adams on the d-line are also standouts. OK, here's the offense, which looks like a future hall of fame roster: Rich Gannon, Jerry Rice, Tim Brown, Jerry Porter, Charlie Garner and huge tackle Lincoln Kennedy. And don't forget Sebastian Janikowski, who, if he's on, can account or 9 points on his own. For the Titans, on offense, you have Steve McNair, tight end Frank Wychek and that's about it. On defense, you can make a case for safety Tank Williams, but he's only a rookie and the chances of him being burned are equally great. Jevon Kearse and Kevin Carter make the grade at the defensive end spots, but how they plan to get through the Oakland line is another question.

You wonder why no Titans made the Pro Bowl? Well, mostly because their players played over their head and with plenty of heart. It's unfortunate, but though the Titans have guts galore, they just don't match up against a Super Bowl-bound Oakland squad. This game should be a classic mismatch and may be all over by halftime.

The Eagles and Raiders will advance to the Super Bowl, in what should be a truly great one.


January 09, 2003

Fearless Rick's Football Picks for January 11-12
Jets-Raiders looks like the game of the week, but the Bucs, Eagles and Titans will have their say.
posted by Rick Gagliano

NFL Playoffs: Saturday, January 11

at Tennessee -4 (44) Pittsburgh - The Steelers are coming off the miracle win over Cleveland, and spent a good deal of energy doing so. They are also complaining about having to play with only six days rest, while the Titans have had a full two weeks. The rest has probably been good for the Titans, especially QB Steve McNair, who has been nursing nagging injuries all season. McNair is again being overlooked as a running quarterback, with most of the emphasis being place on the McNabb-Vick matchup later in the day. McNair has as much running ability as nearly anybody in the league and he's smart, knowing when to run and when to dump off. Also champing at the bit for this one is Eddie George, who will be tested against the tough Steeler front seven. What became crystal clear last week is that the Steelers cannot stop a solid passing game. The Browns sliced through them with ease all day long. Additionally, while the Titans aren't getting any headlines for their defense, but they are as solid as they come. The Titans will stomp their former divisional foe and head to the AFC Championship. This one shouldn't be very close and will go over only if the Steelers can manage two touchdowns.

at Philadelphia -7 1/2 (38 1/2 ) Atlanta - Check out the over/under line here and you'll see what the pros in Vegas think of this game. Not only are the upstart Falcons more than a TD underdogs, but the o/u line is short as well. Why? Because Philadelphia has a Super Bowl-caliber defense. The defense will contain Mike Vick and stop any kind of passing game. Take a close look at the two teams. This is a classic mismatch with the exception of Vick. Donovan McNabb, even though a bit rusty, will be able to lead the Eagles to numerous scores against a very questionable defense. The Falcons lost three of their last four in the regular season and beat up on a Packers team that was exposed by the Jets a week earlier. They just don't have the guns to stay in this one. Philly wins 34-10.

Sunday, January 12

at Tampa Bay -6 (39 1/2 ) San Francisco - San Fran is lucky to be in this game after a horrible three quarters against the Giants and then a remarkable, disputed comeback. Terrell Owens and Tai Streets led the way back for the 49ers, who looked awful on defense against the Giants and many other teams. They do have a formidable weapon in QB Jeff Garcia, who has shown more guts and grit than any quarterback this season, but the defense and a spotty kicking game may be their undoing. For the Bucs, the classic underachievers, this game is huge and they are expected to win with defense. It won't be an easy task as the 49ers have two good running backs in Kevan Barlow and Garrison Hearst, though neither is a threat to break the big one. Tampa Bay will grind on offense, and this may be a breakout game for Keyshawn Johnson, who must be drooling over his prospects against the 49er secondary. He also gets QB Brad Johnson back, which is a huge plus for the Bucs. He's the man who makes the offense click and if on his game, will lead the Bucs on to the next round. Bucs win this one, but it will be close and low-scoring. The Niners should be able to put up 14, so Tampa Bay has to score three TDs to win and cover. They will, but it's still no lock, especially since the line moved from 4 1/2 to 6.

at Oakland -5 1/2 (47 1/2 ) N.Y. Jets - Here's possibly the best matchup of the weekend, but the Jets seem to be out of options, finally. In the past two weeks they've beaten up on Green Bay, a weak squad, and an Indianapolis team that looked sluggish and unmotivated. Yes, the Jets are good, and have improved dramatically since mid-season both on offense and defense, but the Raiders have a huge edge in experience and home field. The Raiders will win the game, but I can't see them blowing the Jets out. Coach Herman Edwards has proven himself to be a master motivator and probably coach of the year. The Jets may spring the upset, but the more likely scenario is for them to lose a close game. I make this one 30-27 Raiders.


January 03, 2003

Where Dare the Markets in 2003?
Practical Investment Strategy for the New Year
posted by Rick Gagliano

If you're one of the lucky few who have any investment money left after the last three years of declines on the major indices, you may be getting a very loud message from the markets as 2002 draws to a close. With the majority of prognosticators/strategists still betting on index increases for 2003 (most of them have been wrong 3 years in a row) why should be believe them now?

For instance, chief U.S. strategist Steve Galbraith of Morgan Stanley predicts the S&P to go to 1,050. Tobias Levkovich, Salomon Smith Barney's senior institutional equity strategist, sees the S&P hitting 1,075 by the end of 2003. Abbey Cohen expects the Dow will end 2003 at 10,800 - a nice 27% rise. And Ed Yardeni puts it at 10,500. The S&P closed on December 31, 2002 at 879.82, and the Dow closed at 8,341.63, so these expert strategists are looking for a rise of more than 15%. Quite impressive, but, probably wrong again.

More talking heads will be trotted out on CNBC and other financial networks over the next few days, offering their advice to investors. Most of them will predict rosy rises for speculative stocks. The truth of the matter, what three consecutive years of losses on the major indices should be telling astute investors is this: THE STOCK MARKETS ARE NOT A SAFE PLACE FOR YOUR MONEY! Add a ditto for stock and equity funds, where most of your retirement/pension/401K money is parked, and get ready for another year of woesome returns overall.

A 4th consecutive year of decline on any major index would be unprecedented, but we live in truly extraordinary times. Not even during the Great Depression, after the bust of 1929, did the Dow Jones Industrial Average (the oldest of the major indices) turn the trick of 4 consecutive losing years. So, predicting an upturn would seem to be indicated as a safe bet. But we've seen safe bets come and go, and there's nothing safe about investing in equities in 2003.

Not convinced? You say you need proof, reasoning, rationale? Well, here's just a smattering of interrelated reasons why stocks in general are not good buys:

There's more, mostly bad, news and signals around, but the examples above should be enough to give any investor pause. Indeed, risk aversion remains very high as 2002 draws to a close. Additionally, analysts are still touting stocks - it's their job - even though there is no compelling reason to buy most publicly-traded securities. Equity fund managers are watching net outflows continue unabated.

The current rage is, and will be, stocks which offer dividends. In 2003, you'll see analysts recommending such stocks as safe and reasonable, especially if the Bush administration forges ahead with plans to kill the capital gains tax on dividends. Some companies will surely announce dividends for the first time, hoping to boost their share price and cash in on the rush to some supposed quality.

The trouble with a strategy of buying stocks which offer a dividend is that while such companies may look attractive with yields of 6-8-10% or even higher, such gains can easily be wiped out by a decline in the share price. Such a decline boosts the yield, but erodes the underlying capital. Caution is always advised when dealing with a new Wall Street darling investment idea.

So, what's a small investor to do and what is one to expect from the coming year? Where should one park or risk one's money in such an environment? These questions are not easily answered and while everybody's investment goals are different, we all face underlying forces of inflation (now tame), deflation (probable) and taxes (inevitable). Here's a rough guideline for a relatively safe portfolio with the premise that most stocks will continue to be bad investments:

While the above portfolio may seem radical, let's remind ourselves that most investment advisors weigh their portfolios heavily toward stocks and bonds and away from cash and commodities (gold). But after witnessing or participating in the spectacular losses in equities over the past three years, strong cash positions now, in hindsight, look very, very good.

So what about the markets for 2003? One word: DOWN. I won't say exactly when, but before the year is out the major indices will see these bottom points or lower: DOW: 6350; NASDAQ: 925; S&P 500: 675.

The question that remains is when will these numbers become reality, but that's really a matter for market timers, options players and side bettors. If I had a crystal ball to gaze into, it's entirely possible that I'd see a scenario like this: The markets stage a soft rally to open the year but that's quickly snuffed out by war in Iraq, trouble in Venezuela and rising oil prices with a market bottom sometime between late February and mid May. A rally commences in June, and the markets rebound or trade sideways until September, then begin to fade. By November, a new bottom has been put in, the pundits once again announce the bottom is IN and out trot the analysts on the cable shows and in the financial press calling for a monstrous rally in 2004. Then again, I don't have a crystal ball, and I could be completely incorrect, but, not as incorrect as the many strategists calling for Dow, Nasdaq and S&P rebounds.

Overall, as we have seen and as I will show, the true, final, unequivocal bottom has not yet been put in on the major indices. The markets are bound to retest the lows put in during the October 2002 rout. A final bottom may be put in at some point in 2003, though the probability of that occurring is only around 25-30%. We're in a multi-year bear market which still has excesses to spin out and quite a few major changes in the economy would have to occur in a short time for a bottom to form and make stocks a good investment once again.

As a guideline for tracking market movement, one need look no further than the venerable Dow Jones Industrial Average (DJIA), which is currently in the throes of a long-term primary bearish trend. This primary trend will remain in place until a break-out occurs, which will be documented as follows: After a short-term bottom is put in, a rally occurs to push the average to a point above the most recent high and the average stays at that point and falls no further than 5% below that point for 3 months.

To illustrate, let's look at the Dow during two important recent intervals. First, the huge decline brought on by the tragedy of 9/11, and the subsequent rally. All figures are closing prices. The Dow had been in a downtrend, albeit a slight one, for well over a year, beginning with the all-time high reached on January 4, 2000, at 11,723.00.

On March 14, 2000, the Dow reached a new interim low of 9,811.20 and rallied back to a high of 11,310.60 on September 10, 2000. Not a new high, so the downtrend remained in place. On March 22, 2001, a new bottom was put in at 9,389.50. By May 21, it had rallied to 11,337.90, marking a price above the previous high. But it failed to maintain the 5% three-month threshold, declining to 10,690.10 on June 14 and continued to drift lower until reaching its low point of 9,605.50 (still above the previous low) on the fateful day of September 10, 2001. The confluence of events dropped the Dow to an interim low of 8235.80 on September 21 and another rally commenced, with many market observers calling the bottom as the average raced back to 10,635.30 on March 19, 2002. Once again, the index had failed to reach the previous high (11,337.90) and the inevitable slide commenced, culminating in a massive sell-off to close July 23, 2002 at 7,702.30.

Now we enter the second critical phase of the market trend. After seeing the declines of July and blaming them on corporate scandal and corrupt analysts, the market stage some remarkable rallies in August, 2002, but topped out at 9,053.60 on August 22. By October 9, the Dow had slipped once again below the previous bottom, to close at 7,286.27.

Again, a rally ensued and again, pundits began calling the October washout the absolute bottom. This (and the previous) rally was decidedly short-lived, lasting a scant 35 trading days, ending at 8931.68 on November 27, 2002, once again short of the previous high, and therefore insignificant to the long-term trend.

Dow theorists adamantly stick to these and other rules and guidelines as they have been tested and analyzed and never effectively refuted. Primary trends are very difficult to break out from and the current bear trend has a tight grip on this market. To call for an end to the bear market, the Dow needs to put in a new bottom above 7,286.27, break above 8.931.68 and stay above 8485.10 for 3 months. If that occurs, we can call a new bull market and get back to buying equities.

However, since the last three rallies have failed to surpass the previous highs, this scenario seems difficult and just so much wishful thinking by long term bulls. The contrary, albeit unpopular, view that we are in the midst of a long term secular bear market which may stretch into 4, 5, 6 years or longer, seems to become more plausible with each passing day and every little tidbit of bad or uninspiring economic news.

In 2003, you'll hear the word reflation being bandied about on the airwaves and in the financial press. Essentially, what reflation means is that the Fed, or the underlying central bank, is printing more money, expanding the supply. With reflation, or more money coming into the market, the idea is that people will spend, or improve demand. If the reflation results in savings however, instead of spending, the opposite is likely to occur - deflation. Right now, both have equal chances, but, without any significant expansion in corporate profits and capital spending, the latter, deflation, has the upper hand. There's significant risk to investors at this time and answers will not be forthcoming until at least the beginning of the 2nd quarter of 2003.

While the argument that the bear market has exceeded all expectations, there are equally plausible arguments that it is only in mid-term and will continue. Therefore, my recommendation is to avoid stocks generally and buy gold and gold-related issues with gusto.

Disclaimer: Statements made by Rick Gagliano are wholly his own and do not constitute an advisement or endorsement to buy or sell any securities, commodities or funds. All investments carry risks and investors should perform their own due diligence. Rick Gagliano's opinions are his own and do not necessarily reflect the views or opinions of Downtown Magazine or any of it's affiliates.


January 01, 2003

Fearless Rick's Football Picks January 2-5, 2003
Late Bowl Games and NFL Playoffs on Tap!
posted by Rick Gagliano

Last week ATS: College Bowls through Dec. 31: 5-8; NFL: 9-7

Thursday, January 2
Orange Bowl At Miami
Southern Cal -6 (57) Iowa
- Possibly the most contentious game of the bowl season matches two top 10 programs. I don't agree with the line, as Iowa has proven tough against everybody at 11-1. Take the points in what figures to be a very close game.

Friday, January 3
Fiesta Bowl at Tempe, Ariz.
Miami -12 1/2 (50 1/2 ) Ohio St.
- For the national championship, all the marbles on one game! The bookies think this is no match, and I have to agree. Getting Miami at anything under -14 is just too good to pass up. With a 33-game winning streak on the line, I can't see them losing their most important game of the season. In defense of Ohio State, they played better than anyone expected, but the offense is shaky. If they get down early, it could be a long evening. Miami wins big and takes the title without controversy.

NFL Playoffs - Happy New Year!

Saturday, January 4
at N.Y. Jets -6 (42 1/2 ) Indianapolis
- My, oh my! How things change! A month ago, Indy was cruising in the AFC South and the Jets were on the outside looking in. That, of course, was before the Colts got hammered by Tennessee and the Jets went on an improbable and inspired run to win the AFC East. But this line is a little misleading. The Colts will be better off on the road, where they have gone 5-3 this season, including wins over Denver, Philadelphia, Baltimore and Cleveland. Additionally, Eggerin James, the Colts' 2-time NFL rushing leader, who struggled this season with injuries, looks to be finally close to 100%. The Colts, a team which just about everyone is writing off, went 6-2 down the stretch, with their only losses coming to two of the hottest teams in the league - Tennessee on Dec. 8 and the NY Giants on Dec. 22.

The Jets got plenty of help in winning the AFC East, especially from Miami and New England, who both blew games down the stretch, and then finally knocked each other out when the Pats won in OT last week. New England's win opened the door for the Jets, who played inspired football in routing the Packers. That was also the Jets' only win against a playoff team all season. They lost to the Browns and Raiders earlier in the season.

The Jets will need to pressure Peyton Manning, especially from the outside with John Abraham and various blitzes to succeed here. If the Colts can get Eggerin going, the passing game will open up for Marvin Harrison, one of the game's most dangerous deep threats. On offense, Chad Pennington will have to continue his brilliance against a fairly stout Indy defense, which finished 4th in the AFC overall. For stats fans, in the AFC, the Colts rank 5th on offense, 4th on defense, while the Jets are 12th and 14th, respectively. Yes, the Jets were only better than San Diego and Kansas City on defense during the regular season. In order to win, the Jets will have to basically outgun the Colts, which could be a difficult task. Momentum is one thing; having solid units on both sides of the ball is another. The Jets do have an edge on special teams, which has been instrumental to their overall success, but I doubt that will be enough to hold off the Colts. The Jets may win this one, but the emotion spent in getting to the playoffs may have taken it out of this team. The Colts, on the other hand, have the enviable "advantage" of being the underdog.

at Green Bay -6 1/2 (40 1/2 ) Atlanta - Both of these teams overachieved during the regular season to make the playoffs, but the Packers have a huge edge in that they have NEVER lost a playoff game at Lambeau Field. Now, Mike Vick is an exciting and exceptional player, but he's not going to end that streak! The Packers loss last week to the Jets was somewhat of an aberration in an exceptional season - one in which they overcame numerous injuries, especially to their defense - which probably is not yet at an end. The Packers were 12-4 and 8-0 at home, a stat that usually spells success in the post-season, and one that is probably not lost on Atlanta's head coach Dan Reeves, whose Falcons took Green Bay into overtime at Lambeau in the season opener.

The Falcons backed into the playoffs, losing three of their last four, and look like the most vulnerable team in the post season despite the brilliance of Vick. Much of Atlanta's success was due in large part to the complete unraveling of New Orleans, who lost their last three, to Minnesota, Cincinnati and Carolina. Against playoff teams, the Falcons went 1-4-1 in the regular season, with losses to Green Bay, Tampa Bay twice, and Cleveland, in last week's embarrassing finale. Vick has little help on offense, so if the Packers can manage him well, Brett Favre and the Green Bay offense should be able to put up more than enough points to win, cover and move on to round two. If the Packers can get Ahman Green going on the ground, the passing game may open up for Favre, who is one of the best ever at exploiting a questionable secondary. The only thing to worry about here is a late, meaningless score by Atlanta to cover the spread. Otherwise, Green Bay holds all the cards in this one.

Sunday, January 5
at Pittsburgh -7 1/2 (42 1/2 ) Cleveland
- Here's a lopsided line, if every I've seen one. The Steelers won two regular season games over the Browns by identical 3-point margins. Now, we're in the playoffs and the Steelers are suddenly better by more than a touchdown? The oddsmakers know that whenever a team wins two games in a season over an opponent, they win the third nearly 100% of the time. Some things have changed, however. In the first game, the Steelers were rescued in the 4th quarter when Tommy Maddox entered the game in relief of Kordell Stewart and engineered a tying drive and got Pittsburgh within field goal range for the 16-13 win. In the 2nd game, at Cleveland, the Steelers held on after taking a 17-14 lead to win it 23-20.

In both contests, Tim Couch was at QB for the Browns, but he's gone and Kelly Holcomb will be behind center. Holcomb has played sparingly for the Browns this season, but he's played well with a win over Cincy and a disputable 1-point loss on opening day to KC in which he threw for 326 yards. He also played most of the game last week, leading the Browns to the playoffs with the must-win over Atlanta. Also, the emergence of rookie RB William Green has to be taken into consideration. He was a non-factor in Cleveland's two losses to Pittsburgh, but has since come on and become a go-to back. The Steelers will reportedly use 3 running backs in rotation, as Jerome Bettis is less than 100%.

Considering that these teams play each other at least twice every season, I see no reason to install the Steelers as such a heavy favorite. Take the Brownies and the generous spread. They may surprise in the Steel City as the Steelers are developing quite a reputation for failure in the playoffs under Bill Cowher - 7 division titles, 1 Super Bowl appearance.

at San Francisco -3 1/2 (40 1/2 ) N.Y. Giants - This one is almost too easy. The Giants are on a hot streak, having won their last four games to reach the playoffs. San Francisco lost four of their last seven games with their three wins coming over Dallas, Arizona and Seattle. What's worse, in those three wins, the 49ers had to hold off a surging Seattle team, winning that one by 7. They beat the lowly Cardinals by a field goal and needed a last-second TD catch by Terrell Owens to beat the Cowboys. Add to that the ugly loss on Monday night to the Rams and you have a team that's running scared. The Giants, surprisingly, sport the NFC's leading passer (Kerry Collins, 4,044 yards) leader in receiving yards (Amani Toomer) and Tiki Barber, 2nd in the conference in rushing. And just how do you prepare for tight end Jeremy Shockey? Besides, the Giants have a very solid defense, something the 'Niners can only dream about. This could get ugly early and turn into a complete rout for the Giants. The 3 1/2 points are a HUGE gift.


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