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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: Rob S. who wrote (11041)	12/8/2000 11:28:57 AM
From: Rob S.	Read Replies (1) \| Respond to of 11555

After another test, the NASDAQ and semi stocks in particular have bolted up after INTC, LSCC and others warned of lower expected results. This is an excellent indicator that a bottom had been reached and a reversal occurred on Dec 5th. This is likely to continue to be a rocky bottom but all the major ingredients are in place for the NASDAQ to nervously move up. One of my primary market indicators is a judgment of how the market reacts to bad news: When a market has been on a upward trend, bad news punishes stocks severely and good news has little positive effect, look for a reversal downward. When the market has been in a doom and gloom down trend and bad news does not damage stocks as much as could be expected, (or in this case actually is reason for them to move up), and good news propels stocks higher, the market is likely about to reverse. Late last year and early this, the pattern of trading was "buy on the rumor, sell on the news". Expectations were so high that simply beating Wall Street estimates was not enough - stocks ran up ahead of earnings and other announcements and then sold off. Recently we have seen the opposite: Intel and other chip stocks went down sharply in anticipation that Intel sales and profits were falling off the edge of the earth. When INTC announced merely lousy expectations it was reason enough for the chip and equipment stocks to rally. Combined with prospects for increased liquidity and lower interest rates, any sign of light at the end of the tunnel is likely to be taken as cause for stocks to move higher. However, we are still in the earnings warning period and the presidential election is still undecided. I think this is a very good time to buy chip stocks but be careful not to buy at the top of rallies. It's likely to stay very choppy until the external events get resolved and a solid trend emerges.