To: American Spirit who wrote (15658 ) 6/2/1999 8:05:00 PM From: pater tenebrarum Respond to
AS, whether growth stocks are truly oversold or not is mainly a function of where we are. there's nothing wrong with betting on a bounce, i have done the same today with CMGI & DCLK but exited before the close. my main worry is not necessarily inflation. this is only the reason given by commentators to account for the market's decline. it's the technicals i watch that have me worried, coupled with the market's high valuation. the current environment betrays extreme nervousness, and that means the market is vulnerable to any unexpected negative news that may be forthcoming. if a rally were to start from here, i would take it day by day and i certainly wouldn't trust it. whether today's lows were a firesale is a matter of relativity, so to speak. don't forget that the nutz, while off considerably from there highs, still are even more so off their lows. CMGI's 52-week low was a split-adjusted 8 5/16 for instance. i would be a lot more sanguine if there were some negative sentiment discernible, but that is just not the case. on the contrary, one 'expert' after the other is reassuring us that the bottom is in and we learn day after day that the bottom wasn't in after all (this is specifically regarding nutz and drugs - i remember a lot of 'strong buy' endorsements by analysts for members of both groups at far higher prices). the same goes for the bond market, which has been repeatedly declared to be at a bottom, at 5,50%,5,60%,5,75%,etc. (the bullish consensus on bonds at least seems to have been clobbered a bit lately). at the very least, caution seems advisable at this juncture.
