Rich, The following is from IBD's "the big picture", NAZ volume is down 7% comparing to Wed. We need confimation later next week.
investors.com
The Big Picture
Friday, October 20, 2000
Printer-Ready Version
Positive Microsoft News
Fuels Market Rebound
Investor's Business Daily
Microsoft and other big techs gave the market a badly needed shot in the arm Thursday.
Late Wednesday, the Windows software maker said it earned 46 cents a share in the September fiscal first quarter, a nickel above Wall Street’s views.
That translated to 15% year-over-year growth, a slight improvement from the last quarter, but still far below the 50%-70% gains it regularly posted the past three years. Investors paid more attention to Microsoft’s comments that major companies are starting to load Windows 2000 into their PCs. The stock soared 20% to 61 7/8.
Microsoft wasn’t the only positive surprise. Techs such as Broadcom, Vitesse Semiconductor and NYSE-listed EMC Corp. also beat estimates. Primed after Wednesday’s reversal, the Nasdaq roared ahead 7.8%, its third largest gain ever.
While tech stocks gleamed, volume sank 7% on the Nasdaq. It was the second time in less than a week that the tech-heavy index scored a massive gain in lighter volume than the day before. It’s a curious lack of conviction, given the heady advance.
Microsoft and Intel helped the Dow industrials to a 1.7% gain. They combined for 82 Dow points. Investors took profits on cyclical components such as Kodak, 3M and Procter & Gamble. Volume on the NYSE also dropped.
Other indexes enjoyed support. The Value Line index rose 2.7% and popped back above its 200-day moving average. The S&P MidCap 400, which found support at this long-term line Wednesday, gained 3.3%.
Recent history has shown the market likes to bottom in October. The month marked turning points in 1987, 1990, 1997, 1998 and last year. Let the market decide if that’s the case this year.
The previous rally attempt that began Oct. 13 was crushed Wednesday when the indexes sank below that day’s intraday low. Thursday counts as the first day of a new rally. Another big advance in heavier volume later next week would offer a confirmation.
The market’s upward momentum could continue as more tech firms pounded profit estimates after the close. TriQuint Semiconductor jumped 9 9/16, to 33 3/8, then gained more in late trading after it beat third-quarter estimates by a nickel. SDL Inc., Elantec, Quest Diagnostics, Flextronics and Scientific-Atlanta also beat the Street.
If the market is truly ready to rally, there should be a lot of great stocks building sound price bases. TriQuint isn’t one of them. At 50% off its March 1 high, the stock has lots of overhead supply to clear before it can post new highs. On the other hand, Check Point Software, Idec Pharmaceuticals and Forest Labs have broken out of bases.
Investor pessimism has yet to reach extreme levels. A data error by the Associated Press sent Wednesday’s put/call volume ratio soaring to 0.95. The actual figure was closer to 0.84. The ratio sank to 0.60 Thursday, which isn’t reflected on today’s chart. |
