I agree. I think there's mounting concern and frustration over the fact that this latest buy-the-dip "rally" lasted only about 2 1/2 trading days. There's also plenty of bad (very bad) news out there for bears to use to fuel selling: the API reports on energy stocks are consistently coming in far lower than estimates, the Euro can't find a bottom, the Middle East is still a mess (even Jordan, which just signed an important trade agreement with the U.S., is consumed in anti-Israel and anti-U.S. passion), credit spreads are widening, credit quality is declining, margin debt is a very high 4-5 percent of the overall capitalization of the U.S. equity market, technology capex is slowing (which doubtless will have implications for productivity going forward), and so forth. So far as the Nasdaq goes, the scariest thing to me is the fact that so much big money and borrowed money is heavily overweight technology -- meaning, I'm afraid, that in the event of a real panic (or margin-induced selloff), the door is going to be awfully small for those looking to get out.
I really don't say all this to make the bear case, but just to note that perpetual bears like David Tice are going to have a lot of ammunition when CNBC brings them on over the next week or two to say that the Naz is going to 1000.
Powder's dry, watching and waiting. |
