> I am betting we are close to completing the correction. Maybe
> another 200 DOW points.
Glenn
What makes you feel so sure? In fact, how far Net could continue go down IS a critical question we are facing right now. If you look at DOW, we are only off about 5% from the peak. Similar % with NAZ. But most Net leaders have been down upto 50% from the Apr. high, and not recovered significantly. So if just look at Net group, you might be right. But what if DOW has a 20% drop like we had in last Sep/Oct period? What if NAZ drops back to 2500? Can you still say that AMZN will stay above $100, AOL at $100, YHOO at $135, EBAY at $100? I seriously doubted. What if they all cut another 50% from the current prices? That could happen! One thing I noticed different nowadays is that, Net leaders used to have a trading pattern of "2 step forward,1 step backward". Now it seems the pattern has changed to "1 step forward, 2 steps backward". The reason, too many Net stocks are now in the plate. Take ENGA for example, it traded about 1.5mil shares today, sucked in about $45mil resources which were free for other stocks last week. It used to be the case that when people took profit, they kept money on the sideline waiting for the stock to go down, and then buy back in. Now once they left, they put money into other stocks, therefore the money is gone for good. I see this trend to continue at least in the foreseeable future. The value of most net stocks will keep falling to close up the valuation gap against other stocks. The days when net stocks easily shot up $30 ~ $50 daily is gone forever. Now we should more and more appreciate those $3 ~ $5 gains which we never paid attention before.
Just my observation.
Good luck!
MB |
