in search for a bottom for Nasdaq…


Experienced member
Investors, analysts, chartists, etc. kept searching for a bottom for the Nasdaq (and Dow) for the last two weeks or so…a number was required to stop the fall and start a bounce…only it looks like most almost gave up searching for the bottom and concentrated on economic news to do the job instead…

The problem is that we don’t have any serious earnings news next week, so it looks like the only news that can work as the trigger to change the negative market sentiment can only be intra meeting rate cuts by the Fed…It looks like only the Fed can bring investors back into the market…and we all know what the prescription for this is: an "emergency" interest-rate cut…

Some analysts are in the opinion that “the Dow at 10,000 would spur a huge outcry for immediate help for the Fed…same for the Nasdaq below 2,000."..and at the moment:

Dow Jones 10442
Nasdaq 2263

So they are not far away from the points that could spur a “huge outcry”…as the next Fed meeting is on March the 20th, next week seems to be the most suitable one for the Fed to make an inter-meeting move, that’s is if they are inclined to do it of course…

Bearing this in mind thought it would be useful to screen through some analysts reports and compile quotations that might give us clues as to whether an inter-meeting is possible next week..

David Resler, chief economist at Nomura Securities thinks the Fed looks for signs about consumer confidence, "probably the most important data we'll see, apart from the employment report, in next month or so." Said Restler…pointing that the Fed will make such a move only if economic data indicates deteriorating consumer confidence…"The Fed is without question, especially in light of the behavior of the stock market, focused with laser-like scrutiny on consumer confidence.."

There are also analysts continuing to suggest that investors could start picking up bargains…

"If you're a long-term investor, you're probably going to see values here -- in technology especially -- that you're never going to see again," said First Union's Murphy…

While Tony Dwyer, market strategist with Kirlin holdings was saying, "This should prove over time to be an historic buying opportunity…" adding "Bottoms aren't made easily. Nobody wakes up one day and says, 'OK, we're at the low time to buy.' It's a lot of hard work….There are a lot of gut-wrenching, earnings-driven disappointments that you have to wade through to be able to come out the other end.."

Mercy of Sentiment:

"The market's at the mercy of sentiment, which is very bad," Charles Payne, president of Wall Street Strategies, said. "It's not panic selling, but there's a lack of buyers right now. There's a lot of money on the sidelines."

Institutional Investors’ Cash out of the market:

"The institutional investor...would rather miss the first 10 percent on the upside, rather than going out and picking the bottom…Right now, there's no reason to jump in." said Mike Murphy, head of equity trading at First Union Securities…

Nasdaq loved at 5000..hated at 2000:
"They liked Nasdaq at 5,000 and now they hate it near 2,000. For the first time in 2 and a half years you can own tech stocks [at more attractive] valuations... Long-term investors can take advantage of this situation… though the market will likely remain dicey in the near term…” said Peter Boockvar, equity strategist at Miller Tabak & Co.. "If there will be an inter-meeting rate cut - which we don't expect -- it'll highly depend on the data released over the next couple of weeks," Boockvar added…

Overall it looks like the only way that a turn round can start soon is for the Fed to announce an inter meetings rate cut…and that is not a sure thing yet…but as an analyst said it's got a chance of have we to make some profit.. :)

(no financial advice intended)