Wish I could find some good tech news to post, but all the headlines are earnings warnings. Keeping perspective on the whole matter is important to not getting disoriented as to what your stock is really worth. A range like a Q-Logic, 120 to 28 in a few months, like most storage stocks, makes it a little difficult to know what your stock is even worth or where it will bottom, but the important thing to remember is the markets move in cycles and the cycles are influenced by the Fed Interest Rate. Increases put the brakes on the economy and cuts help it accelerate.
So where are we in the cycle? Well, the Fed Rate peaked last June, and the effect of the Fed Rate increases, was to start us into the downward part of the business cycle. So we are finishing the downward trajectory of the cycle, since the Fed/Greespan watches changes in the economy to gage when he feels the economy has slowed enough to start cutting interest rates so a new cycle can start, and at some point the interest rate cuts will accelerate us up into the next up cycle. If Greenspan knows what he is talking about, then the economy really is stronger than everyone believes, and at some point the cuts that have happened and the cuts that will happen in the future, will lift the economic activity and the stock market. It is understandable that when you are moving through the bottom of the cycle everything looks the bleakest and all hopes are crushed, but then, what do you know, cutting interest rates really does accelerate the economic growth. At some point we will move through the bottom part of this cycle and start moving up. The downward momemtum of the cycle will dissipate with time and more Fed Rate cuts, and at some point change into the upswing that everyone is waiting for.
At some point the Fed Cuts will translate into more than a news article saying they cut the rate, they will translate into increased economic growth. That is when they outlook will grow bright again. Big money knows that this will start to happen soon and they are milking the current negativity for everything it's worth to get the best bargains possible, crush every margin player and buy their shares for dirt cheap. Once the tide shifts they won't be able to scare everyone into giving away their shares. |
