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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED
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To: limtex who wrote (27898)1/2/2001 11:32:32 AM
From: jcky  Read Replies (1) of 65232
 
limtex,

The harsh reality for Porch members is that a "bottom" for the technology sector isn't going to be a simple V or W shaped chart pattern so often seen in the bull market of the past decade. This is going to be a real grinding and churning market with a trading range (consolidation) for quite some time. High multiple growth stocks are now going to grow into their prices and multiple contraction will become the norm.

I've been fortunate. I'm 90% in cash right now and am waiting for the market to tell me it's all right to get back in. I won't catch the exact bottom but I'd rather preserve my capital. And besides, the put/call ratio of the past week isn't very encouraging for the bulls.

There have been claims that the Nasdaq is not in a bear market and is simply experiencing a sector rotation. By that definition, there will never be a bear market and 1929 was just one big rotation out of the equity markets. Opinions such as the above are dangerous and show no forethought. How can anyone properly assess risk if no one can even identify a general market trend?

So what happens now? Your guess is as good as mine. I'll start entering the Nasdaq once Mr. Market tells me the Nasdaq can at least hold a bottom. But clearly the risk/reward ratio for the Nasdaq is more acceptable now than when the Nasdaq was over 4000 less than one year ago.

Regards,
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