Hey Don, looks like you got this right so far!
<<The best money will be made by those who are willing to trade ranges due to an upcoming increase in market volatility.>>
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I certainly agree with that sentiment. The real big percentage gains were made last year by either holding from October 2002 or March of 2003. I think it is going to be another good year, but not with the percentage gains that were made last year.
I don't claim to be as up on the market indicators as you are, but I think January(at least the first part) should be very good. Many are expecting a couple of good days here, then a slight retrenchment, and then some more upside. I don't take issue with that particularly, but I do think that by the middle of January, the semiconductor, semi-equip and telecom equipment areas, plus the NASDAQ in general, will do quite well.
My primary reason for this position is by looking at the earnings estimates for the semi-equip and SOX areas. As we are all aware, the runup in these stocks have been spectacular. Since September, however, the rise in the semi-equip stocks has been very modest and have trailed the SOX and NASDAQ(in which gains have also been relatively modest).
Also, in the last quarter, earnings estimates have been rising, but not in a "big" way. As a result, I think that when the earnings report begin, a lot of positive spin will be generated. Most importantly, it will give the CEO's an opportunity to prognosticate the future outlook which should be looking very good.
In essence, I find it hard to believe that any down movement in the market will go very far given the "rosy" outlook. Earnings estimates should be picking up "big time" with the January earnings report and "looks" into the rest of the year.
But, as always, I have been wrong many times before.;-)
Don |
