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Technology Stocks : Semi Equipment Analysis

SOXX 306.04

0.0%

Dec 26 4:00 PM EST

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To: Donald Wennerstrom who wrote (17655)	8/5/2004 4:40:53 PM
From: Return to Sender	Read Replies (3) of 95640

Don, what we need for a lasting bottom is nothing but downgrades. Complete and total utter despair. What we need is more people like I was in 2002 shorting stocks for the first time ever. Yes, there is a lot of negativity here at Silicon Investor but very few short sellers. Yes, there are a lot of downgrades taking place but also a few upgrades. The majority of investors, like consumers, still feel the economy, like the stock market, is at worst fairly valued and should be growing or rising. It is that bullish sentiment more than anything else keeps the market from being able to find a decent bottom. It is not poor fundamentals. It is not terrible technicals. They are bad but what I see is suggestive of a situation ready to get worse. It is not the negativity of the financial press. It is not the analysts some of whom are still upgrading. It is people like us who keep buying the dip. People like us who keep trying to justify higher stock prices. Oh we have good reasons based on solid earnings. But these are companies that rarely pay dividends, usually don't expense options and they are cyclical in nature. What's the problem with the market? Simply put, there is no where near enough negativity. The latest Investors Intelligence Survey shows 24.5% bears. Schaeffers says that long term bottoms come when the bearish percentage is 55% or more. schaeffersresearch.com What about the volatility indices? Well we got 2 out of three on short term buy signals today but long term? I want to see the VXO around 50 not 18. investorshub.com There is no where near enough fear or negativity. Sure maybe part of it is lack of interest from people who used to be invested in the stock market but who now are buying real estate. But that is not the real problem. The real problem is not enough real objectively measurable negativity. The long term bottom won't form until those market participants still playing the market show high levels of bearishness and fear as measured in the Investor Intelligence Poll and on the volatility indices among other objective measurements. RtS

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