I do think that re-evaluation will come at some point, though I really don't know if it happens here. Maybe weakness here, but I doubt the full on repricing. Still, if it DOES happen here, Zeev's targets will certainly be breached. But again, since the common wisdom is that the semis will lead us out of the bottom, the stocks will probably stay "overvalued" far longer than I expect
If the news is seen as negative against expectations for the semi equipment industry, then we have big trouble ahead for the SOXX. The semis had been holding up the Nasdaq. The semi equipment stocks may stay overvalued even at much lower levels. AMAT hoping to be profitable next quarter, just does not paint a good picture.
XP launch helped create the sense that the rebound was huge; looks like reality is setting in. Looking for the DRAM market to start getting weaker soon as well; might go short MU if it rallies a bit more here on the Hynix news.
The big caps, MSFT, ORCL, INTC, CSCO are also not going to provide any support, imho. I doubt any one of these can do for the markets what Microsoft was able to last year. That was 10% of the Comp and 10% of the QQQs that were held up by one stock.
I believe that there is a reasonable chance of a rather rapid decline in the Nasdaq as stocks get re-valued. Of course that means approaching or breaking September lows.
JMHO |
