heinz, for the most part we are already down - less than 30% of nyse
stocks above 200 dma, etc. Now the market is on a serial killing streak, bringing more sectors to extremely low valuations. (Today it was health care companies, at least). The technology sector has however a much greater mass of companies that haven't been torched
by the bear. How long has G, PG, etc. held onto their "huge" multiples even as the evidence accumulates they are ill-deserved? Any tech company that is halfway predictable and a little big is now elevated to a similar revered status and won't be brought down quickly. Witness how the Oracle pre-announcement is hardly noticable
on its price history.
SO what's left. Inflation news? That is such a load of crock, its the same story we've heard since Dow 2000, nasdaq 250. Just giving
the profit-takers a re-entry point. No most crashes are probably induced by derivatives exposure. These days I suspect that the gold carry trade is causing the biggest problem, any day where gold relaxed
we didn't get the block trading. And look at the fear in the long holders of semiconductors, dumping at the nuclear accident. Now today in the health care sector, somebody gets a judgement - HMOs are not immune - and we get 20% one-day drops. There's a lack of liquidity in somebody's stock holdings. But I don't see much evidence of a wholesale liquidation in the wings. If we "break a neckline" it'll
probably be short, swift, and over. The only trick will be, get the best sector to ride on the way back up.
Just stay away from whacko valuations in the IPOs and internets
and you might be able to make (and keep) some wampum.
Greg |
