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I think we will probably have a retest of the lows the way we did in August and October '98.
I know a lot of people are saying that, and it may happen, but I don't think the dip we had Tuesday is comparable to 98, or to other selloffs that took place over many days or weeks, and were tied to national or world economic events. This week's dip was due to the Abby comments, the MSFT non-settlement, and margin calls. The fact that the naz sprung back as fast as it did is a sign that 3600 was not a low that has to be revisited, but a panic selloff. A revisit-type low might be around 4100. The Naz might see 3600, or even 2600, but if it does I don't think it will be to revisit a low, but because of an interest rate-driven recession, and/or a massive rotation away from techs. I don't think that will happen, if at all, until later this year. That is why I am going long, but hedging with puts. |
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