Are We Seeing That Hoped-For Capitulation?
New York, Aug 30, 2001 (123Jump via COMTEX) -- August this year is practically
the reverse from the same period a year ago.
However, there is one similarity.
Last year this time, CNBC's Maria Bartiromo would appear on the floor of the New
York Stock Exchange and tell the retail investor/viewers day after day that the
market would take off in September.
The reason? The Big Money operators who control the access to greater amounts of
capital would return from their vacations after Labor Day.
The Big Money did indeed return in September, but it didn't extend the August
rally - it sold into that strength.
This morning, Bob Pisani, who reports daily from the floor of the Exchange, has
repeated the same message - once the Big Money returns from vacation, the market
is due for a turnaround in September and October.
Trouble is, those two months are among the worst times to buy stocks. According
to figures compiled by market historian Yale Hirsch, publisher of Stock Trader's
Almanac, September is the worst month of the year.
Maybe the Big Money market strategists who plan the investment campaigns for
wealthy individuals and institutional accounts, both retail and tax-deferred,
will assume the role of contrarians this fall and actually go against historical
precedent.
If that is to be the case, then today's sell-off on rising volume should be
considered a buying opportunity.
The new-highs/new-lows lists that appear in Friday's editions of The Wall Street
Journal and Investor's Business Daily will contain some high-profile technology
names in the list of stocks making 52-week lows.
Here's a partial rundown of what will appear in tomorrow's papers:
Nokia (NOK) Corning Corp. (GLW) JDS Uniphase (JDSU) Sun Microsystems (SUNW)
Charles Schwab (SCH) Oracle Corp. (ORCL) Broadvision (BVSN) Hewlett-Packard
(HWP) Veritas Software (VRTS) Juniper Networks (JNPR) Siebel Systems (SEBL)
Yahoo! (YHOO)
Be mindful of the fact that market bottoms don't normally occur at the open or
close of the regular trading day; they usually happen after the first two hours
in the morning or midway through the afternoon.
While the above-mentioned list consists of stocks that moved sharply lower thus
far in the session, there have been a few bright spots.
Biotechnology is one standout. The 19-stock Biotech HOLDRs Trust (BBH) was ahead
1.02, or 0.83%, to 125 near midday and had traded above 126 in the early going.
Among the gainers: Human Genome Sciences (HGSI), Biogen (BGEN), Amgen (AMGN),
MedImmune (MEDI), Immunex (IMNX) and Genentech (DNA).
Of a group of 15 high-profile tech names Market Highlights has been tracking
after they put in 52-week lows in late July, Genentech has advanced the most.
From a low of 37.99, the shares have advanced 29% based on the intraday high of
49.
Although the Dow Jones Industrial Average has fallen below the psychologically
important 10000 level, the consumer products components - Coca-Cola (KO) and
Procter & Gamble (PG) - bucked the trend.
But those two issues aren't the only stocks from the consumer non-durables group
seeing upside moves.
Other issues, such as Hersey Foods (HSY), Kraft (KFT), Wrigley (WWY), Sysco
(SYY), Kimberly Clark (KMB) and Starbucks (SBUX) have traded in the plus column
today.
We're also seeing upside interest in healthcare issues besides biotech and
genomics stocks, particularly in medical-device makers such as Biomet (BMET),
St. Jude Medical (STJ), Stryker Corp. (SYK) and Baxter International (BAX).
If one only examined the charts for the last four stocks and ignored the popular
averages, you wouldn't know we've been in a bear market for the past 18 months.
You would have to conclude the market has been bullish for the past year.
Be mindful of that market maxim: "It's not a stock market. It's a market of
stocks." |
