>last time you pointed ut to a one day event when the P/C ratio blipped up a little, now it is back to .55, that indicator does not fit your scenario anymore? How about declining volume on this rally, vs increasing volume on last week's swoon down? How does that fit your scenario? Or, how about the slow but persistent increase in new lows? None of these typical contrary indicators worry you even a bit?
To tell you the truth, none of those indicators really mean much to me. My scenario does not really have much to do with P/C, volume levels.
I have not really followed TA...still don't believe it.
You are right, the typical indicators don't worry me.
TA and FA is priced into the market. There is no advantage from using either one at this stage, imho.
As I have stated before, the capitulation by mutual fund families..again the large ones like Janus and Fidelity, which bailed out of tech and are underweighted is a bigger indicator for me....along with record levels of short interest in technology stocks. I say capitulation, especially in the case of Janus and other tech concentrated funds because it turned into a battle for the survival of these funds that really were to focus on all sectors---I am not referring to tech sector funds.
To Janus and other such funds, it meant sell, sell, sell as much tech as possible in order to diversify and avoid bigger redemptions. I noted the huge cash levels of Janus as of APRIL 30/2001..well after the April rebound and still they were underinvested in technology.
Of course, you will look at the chart pattern of the first 3 months and make an observation that any rally was sold and market moved lower. To you it may have indicated an obvious bearish chart pattern and of course it was accompanied by deteriorating fundamentals. Now you see it as just another bear market rally and that is what the charts are telling you and the fundamentals are still questionable..recovery or no recovery late year debate should linger for a while. I can see your logic.
For me it is more important to figure out why the selling was to such a large extent.
Now I know!
That is also my argument for why we will not see a retest of the Nasdaq lows any time soon. There are just too many buyers waiting for the next profit warning to create a buying opportunity.
You had the same argument some 200 to 300 naz points above where we are, but the market turned down. You should view the tepid action today in the naz in face of a certain rate cut as a contrary indicator, IMHO.
True. I later realized that the profit warning season will keep the Nasdaq from lifting higher. It was the wrong time in the quarter for the market to go up. At the same time, I believe short interest has probably increased on Nasdaq stocks (should know this week).
We are still in the last stages of the warnings season...true it extends into early July but at that time actual earnings are also going to be released as well. The big earnings misses are probably already out...my guess is that only small misses are still out there. That is only a hunch.
As we discussed what happened after the Micron earnings last week. You noted your prediction of hitting 18 or 19. That was a big big earnings miss..expecting 15cent loss and getting 50cent loss! The stock only dipped afterhours..next day it was moving higher.
My prediction on that stock was a range in the 40s..where I expect it to settle down....it is now close to hitting it.
The movement in Micron should give one clues of what is happening in this market. It is no longer like February or March. Remember one other thing....the conservative funds that have disliked tech last year and earlier had been buying semiconductors (on valuation)...even if they were avoiding tech in general.
Does it not surprise you (given the above) that Micron still did not tank after the earnings? Semis are not as under owned to the same degree as other areas of technology. It means the pick up in PC demand late year story is being believed by the market! Buying it after the first signs of the actual recovery will not be the best timing. A PC recovery means a major move up in the semiconductors as well as computers accounts for the largest percentage of business for the semis.
About your prediction of Nasdaq 1850 by July 2 or so...I believe you are way off target.
We are entering a more normal market with normal trading patterns...selloffs ahead of earnings warnings season and rally into earnings before selling off again.
I have a target of 2400 on the Nasdaq by sometime in July. I had called it too early, not factoring in the trading patterns in ahead of warnings season. That was a mistake I realized later. However, I am taking the recent market action that 2000 is now the floor even when we were bombarded with profit warnings.
It also means that the move into July will be more explosive, imho. We are going to experience a similiar effect to what we saw in early April...big move up. Traders will reverse to old pattern and cover shorts and go long into earnings, imho.
So many stocks can rebound to support the market move. Funds are probably still bailing out of certain stocks to get them off their books. This applies a little more to the group that is hitting year lows now and did not at end of March. Just look at what happened with NTAP.
A stock like Intel is going to be well into the 30s by July, IMHO. The Joe Osha -- Merrill Lynch bearish call is not working like it did in the past...theories of channel stuffing and using ships to transport etc..
I had called the move higher a bit early..not factoring in the cautious trading in warnings season but my targets are still the same. I would not be surprised to see at 2400 by mid July....I expect it.
Your call is for Naz 1850 by July 2...how about I give it longer...how about mid July to see if your target of Naz 1850 is correct or mine of Nasdaq 2400.
No disrespect...just a friendly market calling competition.
BTW--I don't dig up old posts of yours. I just recall your prediction from recent postings. My idea is to learn from what has happened recently and make adjustments to ones market calling techniques. I have made mine. I would not have put in your Micron call and disagreement with me last week into this post, had you not tried to bring out selective posts.
I have made mistakes in trading. |
