What is strange is that this market is closing its eyes to all kinds of bad news lately. HWP not making their numbers, countless articles about Intel's margins being eroded by low cost computers, lawsuits against Microsoft as well as the Justice Dept. anti-monopoly investigation, problems in the far east and slowing demand for computers there, US trade deficit gapping way up, Japanese bank going bankrupt, disk drive makers constantly warning that they won't make earnings, Greenspan itching to raise interest rates because of the high employment situation, and I'd be curious to know what others on this thread can add.
It is amazing how the bulls can always find a silver lining.
HWP: they never made their numbers anyways, and this time they came close.
Intel: They have been in this situation before (slower growth) and always came out great.
Microsoft: They never lost a lawsuit. They've even rationalized an answer in case they do lose: It is pocket change for them!
Far East: The worst is over.
Japanese bank failure: The govt. will bail them out with public funds.
Disk drive makers: Their problems will drive computer prices lower and thus create more demand.
Greenspan (my personal favorite excuse): He can't raise interest rates because of the problems in SE Asia!
The bulls are being extra greedy right now. This is starting to smell very toppy to me. I don't know how high the market will go on this bull arm but we may be very close to a major correction. IMO the bulls have once again given the market no margin for error. Also, after asking Greenspan to eat humble pie, they are now insulting him and smearing his face in it.
On the Thursday prior to Grey Monday I sold most of my long positions and established a very leveraged short position. What happened on that Monday made me a hated man with my brokerage, here I was the only guy making money on a disastrous market day. Unfortunately, although I did very well, I did not make the killing I should have made because of the frenetic Tuesday that followed. I was able to buy into several transactions on that morning but not nearly as much as I had planned. Well here we are presented with another opportunity by the bulls. I knew it would come, but I am surprised that it happened so fast. I don't expect Monday to be a repeat but I do beleive that all that is needed is a small spark to sink the market again. I will put my money where my mouth is and increase my short positions. My favorites are YHOO, CTXS, SEBL, AOL, BAANF.
Of course, all of the above is only my opinion and all the standard disclaimers apply. |
