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Strategies & Market Trends : Guidance and Visibility -- Ignore unavailable to you. Want to Upgrade?

To: keithcray who wrote (6225)	7/16/2001 7:32:22 PM
From: keithcray	Read Replies (1) \| Respond to of 208838

Updated: 17-Jul-01 General Commentary Going to keep tonight's commentary short because if there is one thing we can all agree upon it is that the sector's near-term direction will be dictated by the upcoming onslaught of corporate earnings... Consequently, no reason to devote much time to a discussion of yesterday's session... Suffice it to say that no news was bad news in that it allowed traders to fret too much about earnings... Relatively light volume also makes it difficult to assign Monday's retreat much significance... Nevertheless, action showed that there's still plenty of angst out there when it comes to techs and the seemingly endless slowdown. Where the sector goes from here will depend quite obviously on the earnings news... Not so much the Q2 numbers, as we know not to expect much good news on that front... More important will be the future guidance... Sector staged a strong recovery rally on the Q1 numbers, largely because number of firms hinted that they saw earnings bottoming out in Q2 or Q3... Sector was also deeply oversold entering the reporting period... The one-two combination triggered a wave of short-covering and bargain hunting... Tough to predict whether or not we'll witness a similar pattern this time around. It's becoming increasingly evident that earnings are likely to trough later rather than sooner... Deteriorating economic conditions overseas and lackluster demand domestically suggest that best we can hope for is that earnings begin to flatten out in Q3 and start recovering by Q102... While that won't be considered great news, it's not that bad either (in that Q1 isn't that far away)... If that is the message that comes out of this reporting period, traders likely to start building positions in many of the global leaders that are trading at reasonably attractive prices... Names such as Intel (INTC), Sun Microsystems (SUNW), IBM (IBM), Cisco (CSCO), Nokia (NOK), Compaq (CPQ), EMC (EMC), Microsoft (MSFT), Hewlett-Packard (HWP), Oracle (ORCL), JDS Uniphase (JDSU) just some of the stocks likely to draw institutional buying interest if it looks as though earnings will bottom by Q4. Robert Walberg