Doc, you know timing the Nascrap pending selloff is 50% art and 50% luck. My art says the biggest of the big tech earnings are now over (we already have MSFT, INTC, SUNW, AOL and YHOO; we also have almost all the top semi's; half the softwares and internuts). Therefore, the beginning of the end of this tech rally is near, maybe by next Monday. It is very difficult to see how the big money will NOT pull some money out by the end of next week prior to the FOMC meeting - it's just a robotic risk management process.
Now, the big question is what happens the day AFTER the FOMC meeting. Here are my scenarios:
1. Hike 1/4 pt. Market rallies initially but reverses down within a day or two because the worry pressure of the next hike will plague the psyche of the market until the next move. The market hates uncertainty.
2. Hike 1/2 pt. Market goes down initially. But may rally if the psyche believes this is IT for the next 3 months. But this perception can be destroyed by one strong inflationary economic number.
3. No hike. Initial rally and probably good for another 10% upside. Then the market will go manic-depressive depending on each and every economic number. Flat or slightly down until the next FOMC meeting.
Historically in the past 5 years of bull market, we tend to have some sort of correction in the late winter (Feb-April) lull. With the unbelievable gains we have so far, the probability favors a managed tech selloff led by the big money. For now, no one expects more than 20% pullback from the Nascrap and 3200 - 3400 is the floor people are mentally preparing themselves. Technical bounces will be automatic if and when Nascrap drops to these levels unless a new war starts in the middle east.
The Bible Code says a nuclear holocaust can happen in Israel in 2000 or 2006 - in case you are not aware. This is the same Bible Code that foretells events that happened thousands of years after the Bible was written. It foresaw Kennedy's assasinations, Nixon's resignation, Oklahoma City bombing, the election of Bill Clinton, moon landing and date of comet collision with Jupiter, assasination of Yitzhak Rabin and the assasin's name, the Gulf war, Saddam Hussain and the date of Scud attack on Israel, and many other world events. There is peer-reviewed mathematical proofs that these predictions are NOT and COULD NOT be due to chance alone. I suggest you read the book right away. |
