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Strategies & Market Trends : Z Best Place to Talk Stocks
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To: hui zhou who wrote (39359)5/3/2002 2:35:16 PM
From: DanZ  Read Replies (2) of 53068
 
One of these days in the not too distant future (maybe even today), the market will snap back sharply. The kind of decline that we have had in the last ten trading days or so is not sustainable in the short term. I do not necessarily think a bottom is in, but I do think that the market will at least retrace and consolidate at a higher level. From there it will either fall back or continue to rally. Given my belief that the economy is bottoming, and there are signs of that in economic data (the Semiconductor Association report for example), I believe that once the market bottoms and retraces higher, it will consolidate before moving higher rather than making a new low.

Too many stocks are being given away for ridiculous prices. I'm not going to provide a long list, but NUAN is one such example. The company has about $4.80 in cash and no debt. The stock traded at a low of $4.71 today. I believe that there are buyers for NUAN and other stocks, but they are lowering their bids because they know the market in in the dumps. Once they lower their bids, the sellers are pushing the prices down enough to force margin puke. That feeds on itself and creates an unsustainable decline caused by a temporary inefficiency in the market.

Good call on SUNW, Ron. ORCL is coming off it's lows as well and represents a huge buying opportunity not only for a short term trade, but also for a long term hold. In my opinion, people are going to look back in a year or two and kick themselves for not buying ORCL at $8. All of this is JMO.

I hope that everyone is hanging in there.

Dan
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