Transcendental Market Fragments:
The Market:
This coming week and the one which follows are the most pivotal period of the year, maybe even the decade. I have myriad indicators pointing toward a major turn occurring during this period, the most notable of which, is the Armstrong change in trend date. Major turns have one thing in common: volatility. Given the current volatile market, that's confirming that a major turn is coming.
The market has been discounting the worst and expecting the best. Each time another bank or hedge fund blows up, securities are sold. But, each time, there are buyers to be found to pick up the slack and take up the merchandise. Perhaps the next week will finally see the bears win a round or two, but my gut feel and intuition is that this will set up a good intermediate term buying opportunity.
The time to buy is when your hands are trembling and almost all Investors are bearish.
Let me briefly remind you what took place in March 2003, exactly five years ago, most investors were screamingly bearish. Few thought that the economy would quickly recover from the drubbing it took from the meltdown of the tech sector bubble.
NYSE Composite Index:
The Market is getting very close to the Measured Move Target at 8040.66. That's about 2.4% downside risk from Friday's close.
NDX (TECH):
Tech represents a refuge from some of the credit market problems which are impacting many other sectors. Tech stocks generally do not depend upon large borrowing and are thus somewhat immune to the kind of credit market conditions we've been seeing lately.
The tech sector did not recover in the 2003-2007 bull market to the extent the rest of the market did. The Tech stocks went into a bubble in 1999-2000, then tumbled.
I can make a case that the entire 2002-2007 rally in the tech stocks was just a B-wave rally, with a C-wave down that should finish off the entire bear market which started at the 2000 top. If I'm right, this would be the ideal time (for long term investors) to begin an asset allocation shift out of commodity/energy/gold stocks and into the tech sector. |
