BG,There is no question about market overvaluation.
In the last stage of a bull market,small caps and a penny stocks runs.That what we had experienced last month.
Now,they corrected 70% or even more.
I don't think that a real bull market is already finish.
What I expect is:
" The volatile market is here, NOW. It's no longer a theory. It will stay that way for some time."
and after that:
Here's how bear markets start,' Hays said. ``The first phase will drag the Nasdaq down by several hundred points through the recent low. But the second phase, possibly by mid-summer, will hit all stocks -- Dow and Nasdaq -- with massive capitulation that will wash out the remaining bulls.'
Depends,what A.G will do with the interest rates.
If interest will be increase, a "second phase" will go faster.
If not,we can expect volatility till the end of the year.
I would say,we have more political question than economical right now.
It is Clinton administration who grow that bubble and
for AG, it is the most difficult time now.
If he will not increase interest rates, our dollar will be weaker,but Gore can win the election and market should stabilize.
If AG will increase interest rates,dollar should be stronger
but Gore election will be a history and market can crash.
As concern the market now,small caps are still in danger and the bottom is not in yet.
Big high tech is the place to be,if NAZ correction will not go to far from here.
I am concern more about CSCO now than WCOM.
I don't have any position in CSCO,but if CSCO will crash,it can drag the whole sector down.
WCOM is cheap now and do not expect it to go much lower.
In my analysis,NAZ can test the previous bottom,can recover from here,or will go to 2950 where I can see strong support.
Trading range between 3000-3600 is the most probable.
After we can expect a second phase,which can be up or down,but in the present time difficult to predict.
el paradisio
|
