From Briefing.com: General Commentary - One signal that the recovery rally might be nearing its conclusion - at least for the short-term - is the market's increased tolerance for risk. Initial surge was led by the large-cap, industry leaders such as IBM (IBM), Microsoft (MSFT), Dell (DELL), Nokia (NOK), Intel (INTC) and Cisco (CSCO). Lately, leadership has come from names like Lucent (LU), Nortel Networks (NT), Openwave (OPWV), Redback Networks (RBAK), Harmonic (HLIT), AT&T Wireless (AWE), Qwest (Q) and Vitesse (VTSS).
Recent emphasis on the sector dogs could have something to do with traders trying to get an early jump on more favorable seasonals/the January effect. More likely, it has to do with fact that traders ran up the first and second tier names about as high as possible and are now shifting into the third tier, highly speculative names for a quick trade. We've seen similar action in other recovery rallies over the past couple of years and typically it precedes another corrective phase.
Could this time be different? Sure. For that to be true, however, fundamentals in the sector must be improving. Unfortunately, that's just not the case. About the best that can be said is that conditions aren't getting much worse and companies have made themselves leaner, more efficient. But there's been no noticeable acceleration in demand, and until that time the sector will have a difficult time sustaining a recovery.
Robert Walberg
Don, on AMAT... I bet they beat expected numbers but they have to guide lower in my opinion.
Once a successful invasion of Iraq is behind us the market could truly start a new bull market. Not before in my opinion.
RtS |
