Happy New Year all thread dwellers!!
Here's a very simple thought worth consideration.
First of all, I'm sure we've all heard the old adage..."as January goes, so goes the rest of the year". Add to that..."as goes the first five days of January, so goes January"
Now let's look at last year. The last 3 months of the year were smokin'...however, the first week of January was not pretty, and January was ultimately a downer for many of the techs. This was then followed by a rough, grinding, 'going lower' year...with a few pops here and there.
2000 is over. The last 3 months were miserable. Pretty much an inverse of last year. I believe that a poor showing from techs in the first week of January is a bad sign for the long side for 2001.
However, that said, I believe in light of interest rate cuts, end of tax loss selling, and the sheer oversold (over shorted) condition of the techs, that the first week of January will be biased to the upside (if not...consider it a warning flag). I also believe the rest of the month will be up.
Last year PUMA ran from the 3's to over 100. It was NAZ's best percentage gainer. Just about the same time all the pundits were highlighting the extraordinary gains of many techs (during the beginning of the 2000 New Year), the bubble started popping...
Now the pundits are highliting the 80%, 90% and 100% losers for the year. I'm seeing many articles about how the short side is the place to be:
<<SHORT-SELLERS
Then again, skeptics have insisted for years that technology issues are way overvalued. Most short-sellers began betting against technology stocks more than a year ago -- and regretted it. "We really got hurt in the beginning," Lang admits. But recent months -- October in particular, thanks to a raft of downward earnings revisions -- have vindicated most short-sellers. "There's big money to be made on the short side now," says Mort Cohen of Clarion Partners. Global Crossing (Nasdaq: GBLX), WorldCom (Nasdaq: WCOM), and Veritas Software (Nasdaq: VRTS) were among the companies with the largest volume increases in short sales outstanding, but it was Covad Communications (Nasdaq: COVD) that topped that list. The number of shares sold short in Covad climbed from 3,150,505 to 16,570,863.>>
redherring.com
In my opinion, these are all signs of a bottom...however, keep a close eye on that first week of 2001.
May we all be blessed with health, happiness and good luck for 2001,
SR |
