The market? Oh, that.
I just got back from summer vaca, and have observed that
that NAS has essentially gone sideways on light volume
for most of the summer, as expected. I think that the
techs have begun rallying off their summer lows already,
just as they did last year in August. However, I think
the damage done this April was severe enough to inhibit
the kind of monster rally we had last fall. Big gains
in the recovery have been limited to a small subset of
stocks, and the more speculative internet stocks have
been left to limp along. My guess is that the stocks that have now recovered to near their year highs will have a hard time blasting much higher - and with the wave of dotcom bankruptcies, traders will be staying away from
anything but the leaders. So the majority of internet stocks may continue to limp or head down, while a minority
of hot tech stocks will move still higher, but at a slower pace. There may be a speculative rally in a new sector such
as biotechs or a resurgence of B2B or wireless mania, but
even that should be moderate.
I continue to think I've stumbled onto something very significant and useful with the BSR. I wish someone besides me would study it systematically. I'm still watching it but have observed it call short-term bottoms very well now twice. It just doesn't stay below .28 or above .52 for very long. Today's range was from .43 to .455, consistent with sustained uptrend. I kind of expect the BSR to peak out in the next week, after the FOMC meeting - we could have a relief rally that pushes the BSR above .52 briefly, perhaps taking NAS above 4K again. This would be a setup, if the BSR continues to oscillate, for a short downward leg to be triggered by something, perhaps continued stories about dotcom failures - then we have earnings season again in late Sept to give stocks a reason to rise... just my ramblin thoughts.
MfN |
