Very bullish commentary......
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That whistle you heard Friday was the all-aboard signal... Tech stocks, particularly the Internet companies, are pulling out of consolidation station and heading due north... Those who hesitate for further confirmation from inflation data, rates, volume, blah, blah, blah, will be left behind... Briefing.com convinced that sentiment has shifted and that we have now entered a period in which traders will buy into dips.
Don't believe us, listen to the market... Two days ago Quantum (QNTM 21 1/8 +2 1/8) issued an earnings warning... In a soft market the stock would have been taken out and shot... Not QNTM, not now... It's up 8% since issuing the warning... Though not tech related, the market's response to UAL's earnings warning (stock shook off early declines to close little changed, with rest of sector pushing into positive territory) was also telling... When stocks rally on bad news, it signals that the underlying market sentiment is bullish.
Sector won't need earnings news to keep it going short-term, as fear of missing out on the next big up move will motivate buyers to return... In addition, the longer and stronger the rally, the more uncomfortable the shorts are going to get, leading many to cover their positions... These factors alone should be sufficient to drive prices generally higher over the next several days... At which time, the focus will be squarely on the upcoming barrage of second quarter earnings... And as Briefing.com has noted repeatedly over the past couple of weeks, the news on the earnings front will be very good.
One final observation - institutional players are returning, as evidenced by the big gains in the large-cap, industry leaders such as Dell (DELL 35 3/4 +1 7/8), IBM (120 3/4 +4 3/4), Sun Microsystems (SUNW 60 11/16 +2 3/16), Amazon.com (AMZN 117 3/8 +8 15/16), Yahoo! (YHOO 151 7/8 +4 7/16), Applied Materials (AMAT 61 13/16 +1) and MCI/Worldcom (WCOM 91 5/16 +1 9/16)... Rotation back into techs likely to be a recurring theme over next few weeks.
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