To all--Despite declines exceeding advances by 1965 to 1778 today on the NAZ, up volume was substantial. The resulting TRIN is .37. Might be the case that we are looking at a turning point leading to a short-term rally. Traders can take advantage. But, for my tastes, I'm going to wait. There may be playable rallies, but they are difficult to play. You have to be really on your game, and who has the time to watch things that closely. My strategy is to keep my powder dry for that one time when I just barely begin to see light-at-the-end-of-the-tunnel in the eyes of people like Fleckenstein. That will be the time to go whole hog both fundamentally and technically.
While I'm here I would like to once again point out the obvious to those who fail to see what is going on with the Fed. They are accomplices in the bubble and they know it. They are scared to death that this bubble will burst and come raining down on financial markets. Thus, when the market is low, they paper over it (with a lot of paper money), cheer everyone up, and once again contribute to the stock of moral hazard out there. When the market is high (the naz, in particular), Greenie takes his next speaking opportunity to say that "well things aren't as bad as we thought," and the bubble deflates marginally. This cat/mouse game has been going on for some time, since 1998 Asian crisis and LTCM debacle at least, and there is no reason to suspect that it will end anytime soon. Perhaps this action creates a floor under the naz. Perhaps the economy gets really bad and the Fed will have used much of its powder and credibility pushing on a string. Who knows.
The upshot is, while we may be in for a short-term up move, don't expect it to move too far. There fundamental problems in tech land, coupled with the incredibly high sentiment levels, will fundamentally keep a lid on tech values.
Cheers! |
