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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Nathan who wrote (76460)	5/3/2001 2:49:11 PM
From: Zeev Hed	Respond to of 99985

Yup, but not much lower than 10250 or so on this trip. Zeev

To: Nathan who wrote (76460)	8/9/2001 7:37:11 PM
From: stockman_scott	Read Replies (1) \| Respond to of 99985

There are a number of factors that continue to support a near-term bounce in techs... They include: oversold short-term technicals; proximity of key supports; relatively high put/call ratio; and absence of potential earnings shocks... Despite these factors, sector having a rough time gaining any upward momentum. Why? Updated: 10-Aug-01 General Commentary There are a number of factors that continue to support a near-term bounce in techs... They include: oversold short-term technicals; proximity of key supports; relatively high put/call ratio; and absence of potential earnings shocks... Despite these factors, sector having a rough time gaining any upward momentum. Why? That question has been bugging us for the past couple of days... Why are techs deciding to play dead now? It's not as though we've been inundated with new information on the earnings and/or economic fronts to alter perception that turnaround not likely until early next year... Cisco's (CSCO) report was more or less what everybody expected, the Beige Book a) revealed nothing new and b) is irrelevant anyway, and Thursday's same-store sales figures were mixed... Basically, the backdrop remains the same today as it was two weeks ago when the tone began to shift for the worse... Bringing us back to the question of what's up. In talking to sources as well as listening to clients, one theme is emerging and that theme is "not buying them until we see the whites of their eyes." In other words, investors have been burned by tech too often over the past year... As such, many traders have no intention of buying tech stocks in anticipation of a turnaround, they want solid proof of one first... If you combine this theme with the recent guidance for Q3 provided by the majority of tech firms (period will remain challenging), prospects for a sustained reversal aren't terribly promising. Best case scenario, Nasdaq bounces between 1900-2300 for another couple of weeks/months until traders get more consistent and more convincing evidence of a turnaround... Worst case, we break through pivotal support levels, investors grow even more skeptical of a turnaround, tax-selling kicks in, and the April low is challenged... We continue to expect the former, though we admit that the market's recent action has made us a little less confident in that prediction.