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

To: Zeev Hed who wrote (78686)	6/14/2001 8:07:07 PM
From: t2	Read Replies (2) \| Respond to of 99985

Zeev, You made a great call on the Nasdaq recently. Congrats. I would assume you think that the market cuts through 2000 easily. What I find interesting is that even a lot of tech bulls we have seen of the past that rode the Nasdaq down, like Brian Finerty of CE Underberg, are talking about retests of lows on the Nasdaq. That is the kind of thing that makes me doubt a drop below 2000 and the fact so many expect it now unlike the first drop. I am not ruling it out..and I am prepared for it. The one thing to note is that the warnings are coming from the optical/telecom equipment sectors..and some wireless as well. The semis seem to be on track with their lower expectations. I am finding it hard to believe that people did not expect the weakness in the telecom sector. We were discussing the weakness that was expected from Ciena after the JNPR warning. That one finally tanked this week. Any company that has not warning was doomed...Nokia and Ciena. Ciena was making money in a tough environment by winning a greater share of business...obviously that can't last when your competitors have excess capacity. I had felt that the market would look beyond this weak sector but it appears that is not the case. Also thought that the weak names in the wireless and telecom equipment sectors would become defensive plays...how low can they go without rebounding? Lu, NT, GLW, MOT. They are at multi year lows. I guess there is a wait for a bit longer. <g> I am watching GLW because it is still expected to make 75cents this year and 80 cents next...little growth but a PE of 20 in a very bad sector may make it a good value stock. Once the recovery starts, the stocks should start doing a lot better; I don't believe that the condition can last because we will either get consolodation or have reductions in capacity. When I mention capacity in this regard, I am not referring to it the same way we talk of semiconductors. Optical is basically requires a lot of labor..assembly work..less automation. Cutting jobs and shutting down plants may not be as costly for this group. Eventually, you get to a situation in which there is more demand than supply sometime down the road. I am not buying the sector yet..but am watching some of these stocks.