Well..... just because the indexes haven't broken their Sept lows doesn't mean lows haven't been broken. (Actually the ndx has broken new lows).
There are tons of stocks lower than in Sept. and quite a few have "reiterated guidance" in the last few days and are skidding to new lows. So..... something isn't right.
I never owned qcom as I didn't consider that cdma was necessarily THE standard that would win out to the exclusion of others. Only msft has been able to pretty much win. But the point being...... reiterating guidance isn't enough or so it would seem. Maybe after we see the whole earnings report and get better forward guidance we can rally.
The macro fundamentals may be "good" in the non tech area, but what if stocks are priced for more than that? If either we in fact are deteriorating (I really don't know if we are but if in fact the consumer never really stopped spending and the "old econ" never really did see much of a slow down, then what kind of rebound do we get?) or if stocks are priced for better growth than we're getting or people are refusing to buy but normal selling is taking place, then we aren't going up. No bueno in any of those situations.
I think that most likely when we bottom we see a base built rather than a quick move back up (or a pop and then sideways) while psychology is healed and profits rebound.
The fed apparently can't help us which is how we've rebounded the market the last few years. Lowering rates isn't going to force companies to hire, raise pay or increase purchases if they don't need to. It's about demand and they have no control over demand. If there really is such a thing as the so called "plunge protection team" they can try to support the market, but while that might alleviate the chances of an outright crash (not sure we'd even get that on it's own since margin use is down and there are more shorts in the market.... shorts provide support in a down market as they will cover when no one else wants to buy), it likely wouldn't help a slow grind lower which I think is probably more damaging psychologically... to me anyway..... you just get the feeling like it will never end and things are hopeless. That feeling (looking at your retirement money fade every day for an extended period of time) might rein in the consumer and that's not a good thing.
Have you ever worked for a company day in and day out and then had a period of time (a few years) where the conditions got slowly but progressively worse and worse? Little by little self esteem drops, coworkers leave, raises become less and less and maybe pay cuts come, benefits are cut (more out of pocket money), hours are cut, etc... Eventually everyone sits around feeling hopeless. It's not a quick process (or everyone would leave right away) but rather just a slow grind lower. Those left after a few years keep figuring how could it get worse and stay, eventually figuring they've got no other choice but to ride it out. Meanwhile they know that the big dogs at the top are raking in money left and right at their expense. Maybe they've even seen things that really should have been enough to send these guys to jail, but they come out with nice severance packages while the company is left to pick up the pieces. New blood has to come in and conditions have to improve to get morale back up and have employees invest in the company (time, commitment, going the extra mile.... which is like money out of your pocket... time is money). I have. And that's what this market seems like to me.... We want to believe it will end and the bull will ride again, but we're now figuring out that "the company" (collectively the stock market) isn't going to return what it did in the past and so the apathetic workers (investors) are sitting around with a hopeless feeling unwilling to commit more and probably won't until they feel like either things are so cheap or things really are turning around. Good thing is that we have young people who can if so inclined put new money into the market. Bad thing is we have old dead wood who want or need to take money out. No telling when the company (market) turns around or what sparks it, but I'm sure that something will because it always has.... history repeats itself.
TA |
