After being skeptical of this entire rally the entire way, briefing.com is now moving to the bull camp.
CONTRARIAN WARNING <G>
Updated: 02-Nov-01
General Commentary
If you've been reading this page over the past month then you know that Briefing.com has been skeptical of the post-attack advance... Mediocre market internals (atypical of early stage bull moves), soft corporate earnings, the ongoing terrorist threat and the slumping economy, have all been cited as reasons for caution... After yesterday's action, we are a little less cautious... Here's why:
Ability to shrug off worst NAPM report in nearly a decade -- Now we've seen such action on several occasions over the past year, so we don't want to get carried away... Nevertheless, trading action over past couple days suggests that investors are discounting fact that economy will be soft over short-term and betting on recovery... Might prove a foolish bet, but it's the one ruling trading for now.
Increased evidence that business in tech sector has at least stabilized, if not begun to improve -- Briefing.com noted several days ago that we began to hear more companies/analysts talking of a pick up in demand... Latest examples include Kulicke & Soffa (KLIC) and Network Appliance (NTAP)... The Semiconductor Industry Association, or SIA, report also provided some encouragement.
Recent selling attempts have been met by new buying -- Unlike in months past in which every rally attempt was greeted by a new wave of selling, the recent tape action suggests a change... Now seeing buyers step in and buy the dips... Buying is still a little tentative, but at least there are interested buyers around.
None of this will matter if the indices fail to take out some key resistance levels over the next few days. (see 10/26 story stock on Nasdaq levels, SOX resistances are at 490 and 520)... However, should the ceilings fall, these building blocks will provide encouragement to sidelined bulls and concern to active shorts.
Robert Walberg |
