The reason I bought on Friday was two fold. First, in spite of being mostly ignored, the employment report was a very good one...not too hot and not to cold. However the markets have gotten so used to being negative, the report almost had to be ignored.
Secondly, from a technical standpoint, most tech stocks are at their 200 DMA. Usually, but not always, its at that level when funds step in to protect their positions. Everyone is talking about how the funds are selling for tax losses, yada, yada, yada....and how stocks will go down further. However, the funds can't sell everything, after all they are in the business of holding stocks and bonds, and not just cash. Besides I don't think the funds are very loaded with stocks right now. The markets would not be so trashed if the funds had been actively participating.
So its my take that the market is now waiting for some good news so that it has an excuse to rally. Granted today was on low volume but I like the action...down near the open and making attempts to rally all through the day..even pulling a reversal at one point. I think the multiple rally ultimately failed today because the funds were not participating actively (because of Yom Kippur), and its only the funds that have the buying power to move the CSCO's, the MSFT's and the Intel's of world, and without those Naz components, no rally can succeed.
Just my take on things.
ted |
