Rudedog - I remember writing about the NASDAQ's performance on this thread back in the January/February timeframe, talking about it's parabolic rise and how a 2k correction was just what it needed. I think the market (NAS in particular) has finally started to act somewhat 'rationally' this year in regard to correcting market excesses. The bubble is being unwound, group by group. The fluff stocks got hit first, followed by quality issues 'priced for perfection' on a group by group basis. Frankly, I was astounded by what the NASDAQ did late last year/early this year, so I really don't know how much lower we go, but my feeling is that the PC and Telecom group are pretty much there, at least in the short term. By telecom I mean T, WCOM, FON - not the equipment providers. LU is probably just about there, but the high fliers - might stabilize, and bleed lower. I'm basing my 'high flier' analysis on what other groups with strong mo have done - once that 'mo' is gone, it does not seem to come back very often. Perhaps the market is finally 'PE adjusting', and if/when the SUNW's and EMC's get hit, that will be the bottom..
Best regards,
John
PS - For an example of how bad it can get however, just look at GM. Profits of 6B, sales around 170B, market cap of around 36B. Imagine what the techs would be selling for if they were really out of favor (ala 1983 on), and were priced like GM. |
