Hello Margaret,
I just stumbled on to your thread while cruising the Intel site tour - quite a neat idea - just reading a few of the commentaries, seems like there has been a lot of angst for the Intel faithful whilst they have had to endure a gut wrenching 30% correction.
I happened to mention Intel as a market barometer as well as its potential as a leading indicator of the future direction of the overall market. Eg. Intel's reluctance to move meaningfully beyond the 100 dollar level, essentially put a cap on the Nasdaq and other major indices.
Once Intel broke through 90 on the way down, the market basically fell apart, but today's action imo bodes well for the future. I'll try and illustrate the point by importing some of what I wrote in the hope that it will raise the spirits of the folk over in this corner.
Whilst I would not rule out lower prices which depends a lot on how much followthrough occurs following today's action, I am confident that a substantial rally will in all probability get under way in the coming weeks. One dark cloud for techs in general is the pounding that the disk drive makers have been taking. They are suffering are beginning to traced out a similar pattern to that of Micron Technology of recent years, an illness which could infect the entire hitech sector later on. Still I would not lose sight of the fact worldwide computer demand could skyrocket over the next few years to the point where there could be a potential shortage or manufacturing capacity! Obsolesence and as yet unprecedented new demand is the name of the game, you can drive a 10 year old car and get from A to B, but you won't get very far in the fast lane of the ISH on a 10 year old computer or even a 3 year old one. If Intel can auction off all old inventory and have PII as its slowest but still pricey chip by end '88 it may be able to maintain its former margin luxury.
Friday, Nov 7 1997 1:31PM EST Reply # 488
Looks to me like we are shaping up for a retest of October's lows in the overall market next week and if this is successful we could mount a significant rally
Note that many of the leading issues that began their corrections early and have corrected by up to 30% viz a vie INTC, GE, MSFT, CSCO etc. are now displaying impressive strength or resistance to heavy selling pressure, ie. leadership on a pretty bad down day.
Example: Intel topped out in January, way ahead of the rest of the market which did'nt really plunge until late March into early April when the Dow bottomed on 4/14.
Interestingly, Intel's correction ended 3/24 and it kind of feels to me that we are seeing similar bottoming action among leaders right now. Once this correction is complete, I would expect a very stong rally to develop.
Don't forget, We are entering a seasonally very favorable time for both bonds and stocks.
Kind rgds
Tec |
