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Technology Stocks : Semi Equipment Analysis
SOXX 276.98-2.3%Nov 18 4:00 PM EST
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To: Donald Wennerstrom who wrote (4022)7/15/2002 7:48:02 PM
From: Sam Citron  Read Replies (4) of 95432
 
The DOW call was purely random, but so is the DOW on a moment by moment basis, which is why I was so reluctant to even venture a guess. But IF we get the 2 to 3 week reprieve you are looking for, the DOW could well rise 15-20% from current temporarily oversold levels, a very tradable rally indeed. Hope is a very powerful force, especially while things are rough. We should know by tomorrow's close. That's a more interesting contest than today's. [My prediction tomorrow: down 150]

As you can see, I doubt that the earnings reports you cite will sustain the rally you expect. Rather I expect it will take some years to mop up the excesses of the bubble. So far the only true sign of capitulation that I have seen is that Fleet has thrown in the towel on Robertson Stephens. I expect to see a lot more of that sort of thing before this cycle reverses and daily trading volume has to dry up to almost nothing. This will not happen for many years if this is a normal secular bear market. And you can set your alarm for a day when the Dow rises by 500 points or more on the highest volume of trading ever recorded, as happened one surprising summer day in '82 when the last secular bear market ended. Everyone, and I mean everyone, had already sold out in the water-torture bear market and cash was yielding only 8%, down from 20% less than a year earlier. It would have been impossible to predict the end of the bear market even a day earlier. But that summer night everyone who was paying attention knew that something important had just happened. The market itself had told them so.

Sam
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