You made some good points, Metsin. Don't let the natives run you off.
Here's what I am seeing:
1) Technically, the Naz "should" have dropped nicely following a standard snapback rally to the Head-and-Shoulders neckline, but--
2) We are coming into the time when the first fed funds rate cut (last January) should start to show itself in the economy, and--
3) Microsoft, which reperesents the largest single stock in the Naz (over 10%) got some great news and drove us thru the neckline, and furthermore--
4) Earnings runs are beginning. (Notice how even very bad warnings, like PMCS's and AMCC's are being bought, not sold?)
Then you've got a lot of people saying the Naz "needs" to retest its lows (as if the market "needs" to do anything!), and doctrinaire permabears chanting holy litany about unprecedented consumer debt and global recession. Oh, and don't forget the everlasting screwball comparisons between the economies of the USA and Japan.
Add these all together and what have you got?
Hell if *i* know!
Despite the fact that I have long been expecting the rate-cut effects to start kicking in around this time, I went short a few days ago to catch a quick dip on the basis of the "neckline" scenario, but got immediately stung by the MSFT news (unavoidable, I think). I think I did underestimate the usual earnings run season, though, so for that I blame myself.
Now we have a holiday week ahead of us and I am not sure what to expect. Lots of conflicting influences working now.
My primary consideration is still "Don't Fight The Fed." The economy is going to start giving us better numbers for several months, starting now. Improved earnings will follow. Watch Q3 for some strong upside earnings surprises. (Reg FD and the nervous lowball corporate guidances of of the last few quarters will account for much of the surprise.) When the corporate earnings begin to confirm the economic numbers, another wave of large buyers will appear. (The first wave was the earlybirds in the last week of March for the Dow and the first week of April for the Naz.)
ig
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