Look at it this way: The Nasdaq peaked almost exactly a year ago. At this point, who is going to put a floor under tech stock prices? That is, who is going to step in and meet the wave after wave of sellers?
1. All the optimistic people who buy techs on 10%, 20%, 30% dips........they've been burned, and then burned again, and now there isn't anyone left who wants to catch the falling knife. BuyTheDippers won't help. A good example of this is the CSCO chart. The last BTD rally was in January. Since then, we just set new lows day after day on low volume.
2. The momentum traders are now scared out of the market, also. It's been a long time since they could find any chart in techland with momentum. They are firmly on the sidelines (or broke). They won't start to come back until we are months past the bottom, and probably 30% above the bottom, wherever that turns out to be.
3. So, who'se left? The Value investors. The people who buy precisely because everyone else is selling. The people who buy on the basis of fundamentals, and don't care how horrible the sentiment is, or how horrible the chart looks. When they step in, and not until then, a bottom will be in. |
