Hi Manish;
Sorry about getting back to you late. I was in Dallas yesterday. Logged on tonight to reply to your private post and saw this one.
>>>What's your read on the techs now? Do you think the earnings season will halt the crash (at least temporarily)?
I really think so but it is a hunch supported by some observations at this point.
I think the question is not how far from the bottom we are but how much of what we've lost so far we would manage to gain in the next couple of weeks before nearing the OCT crash date. I think earnings do matter and would definitely help us from sliding further but they could be considered as things of the past if solutions to dreadful world issues are not actively and promptly sought. In that case, the upside move will be quite limited, short-lived, and narrow in focus.
What has happened in the last few trading sessions to the NAZ has been quite unexpected. Three weeks ago after I turned mildly bullish, I expected a post-MSFT-earnings selloff. That has been the pattern in the last two qtrs. Instead we had a short-lived rally followed by this sharp, broad selloff.
Last week, I raised the possibility that this earnings season may exhibit the same pattern as in January when stocks got crushed early in the month but rose in the days that followed. There are a few positive signs in addition to today's capitulation in the technology leaders that may support such a move. A few leaders such as INTC and MSFT that are expected to meet earnings recovered nicely which makes a bullish case for importance of earnings. Of ~130 tech stocks that I follow, less than five have warned so far. Furthermore, let us not forget that the mid-Sept. rally started during the Montgomery Investment Conference which speaks positively of earnings prospects.
The DOW is also showing bottoming signs. Look at earnings disaster stories like G, S, BA, DIS, HWP, DD, KO. No more sellers left unless the world around us get nastier.
>>>Do you think the nets can remain immune from the beating?
In the short-term, I think so but I keep getting more selective. Now I play only YHOO but there are others doing relatively well.
Clint
PS, Working for a multinational tech. company, I can tell you that bookings for the next six month is no problem. Beyond that, visibility is bleak so some sort of world stimulus package is desperately needed. |
