Thread ---from briefing.com :With the Nasdaq having fallen into our target range of 2660-2600, the time has come to start focusing on the upside. Could the sector remain on the defensive a little while longer? Sure. But a number of factors are coming together to suggest that the Nasdaq is poised for a very nice short-term rally. They are:
Barring a huge day tomorrow, the Nasdaq will end November in the red... This will be only the third time in the last decade that the Nasdaq Composite has fallen for three consecutive months... The most recent example was earlier this year, when the index fell in March, April and May, only to rally by nearly 17% in June... You have to go all the way back to 1990 for the previous 3-month losing streak... After slumping during the Aug-October period, the Nasdaq jumped 9% in November of 1990, and proceeded to rally for another six straight months... Though not a large sample size, Briefing.com expects pattern to hold.
Presidential election will be decided. Anyone who reads this page regularly knows that Briefing.com has argued that the election uncertainty played a very secondary role in the current retreat... As such we don't expect it to be a major factor behind the recovery either... Nevertheless, it will coincide with the rebound and almost certainly be given (too much) credit for triggering the rally.
FOMC Meeting: This analyst expects Fed to adopt a neutral stance at its next meeting. Traders likely to bid stocks up in anticipation of such, as it would pave road for an easing in early 2001.
Santa Claus Rally: December is often a good month for stocks, as investors begin to buy in anticipation of the January effect -- stocks rally in the first part of the year as bonus checks and 401k money finds its way into market.
Cash: Money managers are loaded with cash... Favorable seasonals, resolution to election fiasco, more accommodating Fed and oversold technicals - especially in the tech sector - compelling reasons to put at least some of that money to work.
With the ingredients in place for a strong short-term rally, look for the Nasdaq to run to the 3100 to 3300 area, or roughly 15% to 23% above current levels.
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