The SOX has come so far over the past year. About time we've had some genuine profit taking, IMHO. A few more weeks of it to go, maybe as long as the last week of June. My WAG, FWIW, is that there will be some buying in anticipation of July earnings (depending, of course, on how the Euro shakes out, and especially on whether China and the BRIC countries can keep their economies from a hard landing, inflationary pressures, and another credit crunch), then where things go will depend on the forecasts for the back to school and holiday seasons, as well as the unemployment numbers. ECRI has forecast some lower growth numbers over the past couple of months, some slowdown in the broader economy will happen, but how bad it will be is anyone's guess. Personally, I hope the WH gets its request for some additional stimulus spending. The economy at large still isn't self-sustaining, the additional $200b that they are asking for is a lot from one perspective, but will pay for itself if it keeps us out of a double dip and finishes setting the table for a more self-sustaining economic situation.
Yeah, I know, people will cringe and squeal at the extra debt up front. But it would be better in the medium to longer term, IMO. A self sustaining economy will generate a lot more revenue than a double dip. |
