I think the April collapse was a market-clearing move, and as such made the bottom. Unless some other powerful set of exogenious circumstances comes along I think we're rebuilding now and, as you said, the leaders should reassert themselves.
I've had this knawing June idea, too, especially since I lived through 1994, which this correction recalls. Some of the top-tier (eg Cisco) had their bottom in June after the others bottomed in late April. However, I think it would be coincidence this time...unless we're in a cyclical bear market, which I doubt...at this point in the build-out business conditions for IT are impervious to higher rates. I think some currency would collapse in the face of higher US rates (like the Peso in 1994, or the ASEAN currencies in 1997-98) before IT spending slows.
I handled my margin account too aggressively this Spring. I tried to keep it at 50% equity, but the swiftness of the decline kept me behind the curve. I finally just paid down the debt from savings and let it ride. I was lucky because I took my gains from last year in January, and didn't have the tax man's money at risk, and I had other resources to tap. Trading with the tax man's money was NASDAQ's Achilles' heel this year, IMO.
The mistake I make too often is pyramiding into strength insetead of waiting for corrections to add. I'm always finding tempting situations. My work on this leg is to let my SMA build and save it for real buying opportunities. |
