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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: rudedog who wrote (18079)	10/10/1998 5:04:00 PM
From: JRI	Respond to of 77400

Rude...Dr. Bob- Re: Panic selling....yeah, Dr. Bob, you are probably right that, for the market in general, Thursday was not the "final capitulation" as many market technicians would like to see....(BTW- Is this "final capitulation" thing a self-fulfilling prophesy or what...If I see one more "market technician" go on CNBC and say that we have to see a "market capitualation" before we go (permenantly?) higher, I think I'll scream...these are the same guys that, if we dont get it, will rephrase their argument to state that they called the bottom...Sorry, but many of these "market technicians" would love to see this "final capitulation" for self-interest reasons only;ie, to prove they were right and justify their brand of TA) and to make money of course (like us all)....Ah, the battle for mindshare...... Having now diatribed, yes, Dr. Bob, I do believe that we could see one more "capitualation" since that is what so many people (especially those who do want to get into the market right now, or are still big-time short)want to see...it could happen.....But, will Cisco go to 35? Dell below 80? Is Merrill (financials) going to go to 28 (down) ? If so, certainly not by much, and the bounce could (should) be enormous....I really can't see this.... (Although, more likely, I could see Coca-Cola and Gilette getting washed down a bit more) The reason why I think the odds are against a "final capitulation" is that many stocks have been absolutely decimated already....You've heard all the stories...but the average Naz stock is down 50%...how much further will this go (given recession in the U.S. is by no means certain...)....the Fed has enormous leeway here......We are running a budget surplus and have room for fiscal stimulation............Already, this has been (already) a bigger bear (or as big) than 1974 for most stocks....I'll take current conditions (over 1973-74 world conditions) anyday........I believe that conditions for a quick recovery (I'm talking profits here) are more favorable than 1973-1974 for most stocks...but I digress...my concern (really) is certain stocks....especially techs...and especially Dell, CPQ, Cisco.... I think we saw the big 4 (Intel, Microsoft, Dell, and Cisco) capitualtion Thursday....Financials probably too...some other groups could capitulate...but that would be it.... I think there was (some) panic in Dell Thursday...... 100,000 traded(about 10% of float) is an enormous number...the stock dropped 40% in a week and half (after a "great" quarter was announced by Michael Dell)...Thursday it gapped down and then dropped like a rock(down 19% in one hour)....Sure, this could have been (only) a lot of margin calls, and selling winners to raise cash (munis) but it (to me) that it had the air of some panic (and their is some evidence to support this...Cramer's comments...comments on CNBC (traders) that day, comments on this and other threads..... Cisco was down, what, 8 days in a row...and had lost (about) 35% in value in a couple weeks...The stock was washed out big time.... Historically, these entry points have been great opportunities to buy these companies....Are things different this time? CPQ is a little bit more complicated a story (because of the DEC merger)..but also, it was beaten bloody by Thursday morning... So, Dr. Bob, my conclusion is that you are partially right....but I have seen the headlines in local, national newspaper that past few months....seen comments on this thread...listened to commentators, traders....my brother (who never follows the market) calls me and was nervous......I believe the impact of all the cover stories and headlines are having/have had some effect....I believe that there was some panic...that there was some fear.........Could also be that a good number of investors (and certainly wallstreeters seeing their bonuses go up in smoke) are so shelll-shocked from recent events (over the past couple months)that they dont (classically) show the signs of panic....but they certainly are afraid and are acting accordingly.. But have we seen the worst? Dont know...but I do know if the market does go on to exceed Thursday (on the downside) sometime in the next few weeks, I will average down and get in a bit lower on Cisco(not catching the absolute bottom)....That will be a good price for Cisco......Certainly, I think we are closer to a bottom than a top here, no? Thanks for your thoughts, Bob, and thanks Rude for letting me use you as a conduit.. BTW- If CPQ opens down on Monday, I will probably pick up some for a short-term (one week) bounce and then sell....