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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: LTK007 who wrote (20480)	1/10/2002 12:56:34 AM
From: Sully-	Read Replies (1) \| Respond to of 99280

Briefing.com - Tech Stock Analysis Updated: 10-Jan-02 General Commentary Did Wednesday's late day retreat mark the start of a meaningful correction, or will traders take advantage of the dip to increase their weighting in techs? While the latter has been the norm in recent weeks, valuations, technicals and timing all point to the former... Many tech companies, both big and small, have posted high double-digit -- in some cases triple-digit -- gains off their September lows... Early signs of a turn in the economy/profit picture triggered the advance, with short-covering and technical buying contributing to the push... However, even if the flood of Q4 earnings numbers paint a generally bullish picture, there's no way the pace of earnings growth will match the pace of recent stock gains... In other words, the good news is already priced in. In addition to the valuation argument, short-term technical indicators are overextended... As we've noted on numerous occasions, indicators can remain overbought for some time (as they have recently)... Consequently, just because you get an oversold reading doesn't mean the sector/market is going to correct immediately... What it does tell you, however, is that conditions are ripe for a pullback... Just need a catalyst. That catalyst is likely to be timing... We all know the sector/market has enjoyed a huge rally since late September... And most traders agree on the primary reason for the advance -- more favorable view of economy/earnings... Now all market needs in order to extend the rally is for the upcoming flood of earnings reports to justify the underlying assumptions... But what if the news isn't quite as promising as investors hoped for going in? Do we get another repeat of last summer when hopes for a quick economic turnaround faded, and with it the market's spring rally... If you're sitting on some nice fat gains, do you really want to expose those profits to the risk of disappointment?... Especially having recently witnessed how fast the market can go down if news doesn't live up to advanced expectations... Probably not. In other words, what we saw unfold late yesterday was probably nothing more than gun-shy investors taking some profits off the table on seemingly remote chance that earnings news fails to live up to pre-season hype... Such a pullback isn't likely to last very long, nor is it apt to run very deep... But traders should be prepared for at least a short-term (couple of weeks) shift in the bias from bullish to neutral/slightly bearish. Robert Walberg briefing.com

To: LTK007 who wrote (20480)	1/10/2002 1:29:19 AM
From: Dave Gore	Respond to of 99280

LTK, we can agree to disagree on the timing. That is the popular thinking, for sure, but I think we have a few months left of strong buying. Spring is always a very strong time of year for houses and condos. Then things will slow down a bit for sure. I am a Real Estate agent with Prudential and now that interest rates have trended up, activity has actually increased. People are afraid they'll miss the good rates now and are rushing to lock in. Of course, reports today suggest that the Feds may even keep easing longer than first thought. We could see that result in rates staying down longer than anticipated, although that mainly affects short term rates. With low inflation, the Feds hands are definitely NOT tied in case they do want to lower. Meanwhile inventory is very good and activity and sales are strong. First time buyers who have never owned a house are going for it, because mortgage rates for the first time in a long time are often cheaper than house rent, once you take the tax deductions on loan interest into account. Houses that were over-priced before are now down to reasonable levels, which helps spur buying. The slowdown is in the high priced homes, but the low-mid+ homes, which make up the bulk of the inventory, are doing real well.