Darleen:
This is wonderful market action, the nasdaq retraces and the dow moves up as money rotates into cyclicals and value stocks. Well the move in the value stocks and cyclicals will be limited. People will not pay up for these stocks. They have none of the charm of the tech stocks and will never get the same momentum as a qualcom, triquint, etc. The nasdaq is probably good for another 200 to 300 points on the downside with a possible 500 not out of question. And then voila, cnbc will report recommendations for csco, lucent, intel, qualcom that they are superb buys at their current low levels and the investor should not miss this last opportunity to buy these stocks at an attractive price. In a heartbeat, the cyclicals and value stocks will be dumped and we will be off to the races for the next leg up.
Time frame, one to three weeks. If anyone thinks the fed is going to squash the party in February and restore prudence to the markets they are dreaming. The Fed is captive to markets that are providing the fuel for the continuance of the expansion. To squash the market is to wreak havoc in the derivative, bond, and currency markets. Look for 25 basis points that have been priced into the market and then the celebration. By early February, people are going to need a boost with the millenium party a month old. Get ready for the communication stocks, particularly the dark fiber stocks, they will be one of the next momentum darlings.
Ken |
