bcrafty - Yet another media article suggesting some kind of surprise with the situation we've been talking about here for months - entering warnings season in a weak market already near its lows that's still populated by enough bulls to potentially cause a genuine capitulation event.
Sometimes I think these writers get their ideas from reading message boards, and then go talk to the fundies to get some sound bites to back up the story from more "accredited" information sources.
Anyways.... the stars certainly do seem to be aligning for making this year's and perhaps even a meaningful low in here. Q2 and short term guidance should be poor for tech, and Q3 numbers may not be so hot either, however, they will be comparative to a much lower benchmark come October because of all the 9-11 hits people threw into their 2001 Q3 results.
That will make earnings deterioration next quarter appear to be slowing, something the sharp pencils will play up as a positive trend, or at least try to. Consequently, a lot of tech shorts will be looking to at least temporarily cover during this warnings season (me included) in the belief this will be the best chance to do so for many months, regardless of what the view is for further out.
It's a question of risk management: if we crater, the drop present an opportunity to book some serious short gains, and if we don't sell off big upon confirmation of all the current negativity, shorts have to start wondering about how much is already baked in = time to cover anyway.
Greed works both ways and we all know what happens when you stay too long at the party. Re-shorting any subsequent overly exuberant rally is always an option afterward if conditions warrant it.
JMHO and WTFDIK, I'm just a dumb bear |
