Stephen, I think we are poised for a rally...to test 3100 before the 19th...
We've had 4 different chip warnings in the past week, and each time, about an hour afterwards, chip stocks have mostly rallied on the news (I'm including AH for Intel today in this equation)....that doesn't make sense if there is a lot more downside to come...sounds like typical bottom (albeit, intermediate) to me, "when stocks don't go down on bad news"..
Additionally, the Intel news is out. (along with 1/2 dozen other semi's). Microsoft has had its earnings cut. Apple, Gateway misses, PCs dead. Oracle reports this week, and may be soft, but should make it (similiar pattern to last 2 quarters, but this quarter, softness IS EXPECTED). Motorola warns (yawn, and then they are flat for the day)...EMC, Sunw, Csco, JDSU, Nokia all have indicated they are not having a problem making their quarter, and see continued strong demand going forward...
I haven't heard anything about companies like ITWO, Ariba, Vrts, etc. (new new tech)...but sounds like they are all doing very, very well...
So, I am scratching my head: What other big name tech companies are left to disappoint? Looks to me like we are talking 2nd tier names mostly....how much effect will that have on the 1st tier? Isn't it logical to assume that we have more than discounted "earnings miss fear" already? At the very least, we must be most of the way there...
I am confident of some sort of rally here- even DESPITE the potential for a Gore win. Why? Well, last week, (1) we had oil at $35 a barrel, (2) we didn't know where the Fed stood (was Greenspan going to play, "Quien es mas macho?" with the markets over the next few months) and (3) We had a ton of bad earnings news to come (much of which came out this week)...despite these horrid conditions last week, we actually made a bottom in the 2500-2550, and even retested.
In just a short week, both (1), (2), and (3) look more favorable for stock bulls. Plus, the odds have increased for a Bush victory, and, even if not, at least the damn thing will be over very shortly. Additionally, we just had an impressive high volume, great A/D, record day (10% up)...the kind that usually signal a bottom (intermediate or otherwise)..Another 2 pts: Even more government data has come out showing that the economy is indeed slowning, and labor markets loosening...tomorrow's unemployment report, the GrandDaddy, should make this case even clearer..Finally, we had the aforementioned several warnings, and tech generally rallied afterwards.
So I really struggle to understand why the market, now, would go back to 2550 level (knowing what we NOW know vs. last week), and, even if it would, that we should have any concern that it would break down there (vs. a simple retest)....After all, we have had 3 horrendous months for the Naz...even bear markets get there rallies in..
So, in conclusion, you do sound more like a money flow guy, and I admit I am making a more philosphical argument here for a bottom...2 very different ways of looking at the same problem.....I can't fight your logic, but it just doesn't jive with what I've presented here. One thing's for sure: we won't have to wait long for our answer. Tomorrow is going to be a pivotal day for sure.
Good luck/investing to you. |
