I guess a lot of reason that 90% of the stocks discussed are on the NASDAQ is because of the tech stock bias of SI. As far as my personal opinion, I think now is a better time to be short on NASDAQ as a whole (and the tech-sector) than the Dow.
According to VectorVest, which I use and are very impressed with, the Dow Jones should be valued at over 8,500 based on Fundamental Analysis. This unfortunately does not yet take into account the Asia effect. However according to their information, estimated value of the dow has been a good predictor (sometimes months ahead) of corrections. Corrections have occured when the DJ was significantly higher than the VV "Fair Value" DJ, not lower as it is now. Based on this I think that the DJ correction will not last so long.
VV doesn't do the same for the NASDAQ, so here I am going more on instincts. The NASDAQ is near its all time high, and hasn't correct in the last 6 months. The SI techstocks index is actually up over 50% in the last 6 months. That is huge, especially when you consider that the 50% is across a range of stocks. Many stocks have more than doubled. Over the last couple of years, the techstocks index has had 2 major corrections, each of about 25%-30% and each lasting from mid quarter to the end of that quarter. I think we may see somthing similer again. Admittedly 2 years is a very short time to base patterns on, so I am being cautiously optimistic (pesimistic) about my expectations.
Graeme |
