<The flaw in that saying is that it doesn't acknowledge its model. Which is that when total year profit targets fall short, the shortfall becomes apparent during the 3rd Q.>
Yes, that is what happened last year and that led to the low(s) in October.
<However, this time the profit targets are very low. So no misses.>
Absolutely, we finally got down to the point where the estimates were low enough so no misses in sight. We hit the bottom and we are on the way up - that is the important thing.
<Now on to my current market model. Stocks will continue to gain in price as long as forward quarter revenue and gross margin estimates are increasing. This hypothesis would be disproved if a company increased its revenue estimate and the next day the stock dropped.>
I couldn't agree more and for the next many weeks, that should occur - having "turned the corner", and with all the support generated by all entities(including the shorts who are being forced to cover), it is hard to see any other scenario.
<If we agree that the fuel for the rise is revenue and gross margin increases, then the question is how much fuel is there? I will limit myself to estimating this quarter. My contention is that for every tech sector in the US markets, the majority of companies will report higher rev and GM in October. The anticipation will keep nasdaq rising through mid-October, and the after-glow will last at least another month.>
I like your thinking, but I will go you even one further. After earnings announcements in October - which will beat the very low values presently estimated, we might have a "siesta" where the indices are relatively stable during the remainder of the year. Then when 2004 arrives, it will be off to the races again when we go to 2300 or so when all the new money becomes available from the 401K stock type plans that has to be invested.
Don |
