Nasdaq failed to rally....as sellers continued to dump tech stocks and prevented the Nasdaq rally causing the index to end the day down 31 (1.6%) to 1,940....
With the exception of the networks all tech sectors lost... Biggests losers were among chip, software and Internet stocks... Intel lost 1%, Applied Materials 3.6% and Sun Micro 1.7%. Oracle also lost big 7.4%...
Nasdaq advancers however still outnumbered decliners marginally, by 16 to 14...volume was 1.95 billion...
Nokia did well after saying it expects earnings in line with expectations, thus rallying almost 15%...Ericsson added 5.3%, and Motorola 3.7%...
Merger speculation in the telecom caused widespread gains...
So we had a sell-off, a short-lived rally and another sell-off not as big however...
Analysts tend to agree that Nasdaq is now oversold, but they also agree that we’re in a bear market and there won’t be a rally without a stimulus...
I think stimulus is the main factor from now on...The Nasdaq seems to have found a trading range and excluding further shocking developments, as I keep saying it will hover around the current levels bouncing up and down until it find a stimulus to rally and what happens after the rally will depend on the hopes of economic recovery and earning outlooks...in other words it will depend on the confidence on the Fed’s policy for a turn round in the economy...
It seems to me at the moment neither the buyers nor the sellers tend to get aggressive both just popping in and out causing the bounces I mention...looks like they’re waiting for a bellwether to tell them the earning expectations is improving or getting worse for the final move...that of course means either deepening the crash or rallying...
Tomorrow we’ll see the simultaneous expiration of stock option, stock index option and stock futures contracts. Big market swings often precede the expiration, known as triple-witching, as traders rebalance positions...so expect a lot of volatility...
Analysts came out with various comments about bear market, a possible rally, rate cuts, earnings etc. as usual...here is a round up:
Jay Suskind, director of trading at Ryan Beck & Co thinks Nasdaq has washed out but we’re still in a bear market and he doesn’t expect “another huge leg on the downside...”
Morgan Stanley Dean Witter’s Philip Roth said that it is not necessary for a decline to end climatically and, indeed, some bottoms are built amid dullness over time. “But one or the other is needed and until one or the other is clear, bottom fishing can be a dangerous affair...” adding “The combination of partially improved sentiment indicators, with an oversold condition, suggests a temporary rebound is nearby,”
Merrill Lynch chief market analyst Richard McCabe said he thinks investors should use pullbacks to accelerate share accumulation...“Sentiment indicators continue to improve this week, particularly the CBOE put/call ratio. This indicator is showing its best performance since the late summer-early fall of 1998 when the market was bottoming..”
Salomon Smith Barney’s global strategy team upped the U.S. equity market to a “market weight” from “underweight.” saying “Give our sense that there may be another 5 to 6 percent downside risk to the market, the risk’ reward ratio is becoming more compelling. Further, in view of the likelihood that the Fed will come in to sustain consumer confidence, the picture is beginning to brighten...”
Well let’s wait and see what the triple-witching brings tomorrow and take it from there then...
Riz
With the exception of the networks all tech sectors lost... Biggests losers were among chip, software and Internet stocks... Intel lost 1%, Applied Materials 3.6% and Sun Micro 1.7%. Oracle also lost big 7.4%...
Nasdaq advancers however still outnumbered decliners marginally, by 16 to 14...volume was 1.95 billion...
Nokia did well after saying it expects earnings in line with expectations, thus rallying almost 15%...Ericsson added 5.3%, and Motorola 3.7%...
Merger speculation in the telecom caused widespread gains...
So we had a sell-off, a short-lived rally and another sell-off not as big however...
Analysts tend to agree that Nasdaq is now oversold, but they also agree that we’re in a bear market and there won’t be a rally without a stimulus...
I think stimulus is the main factor from now on...The Nasdaq seems to have found a trading range and excluding further shocking developments, as I keep saying it will hover around the current levels bouncing up and down until it find a stimulus to rally and what happens after the rally will depend on the hopes of economic recovery and earning outlooks...in other words it will depend on the confidence on the Fed’s policy for a turn round in the economy...
It seems to me at the moment neither the buyers nor the sellers tend to get aggressive both just popping in and out causing the bounces I mention...looks like they’re waiting for a bellwether to tell them the earning expectations is improving or getting worse for the final move...that of course means either deepening the crash or rallying...
Tomorrow we’ll see the simultaneous expiration of stock option, stock index option and stock futures contracts. Big market swings often precede the expiration, known as triple-witching, as traders rebalance positions...so expect a lot of volatility...
Analysts came out with various comments about bear market, a possible rally, rate cuts, earnings etc. as usual...here is a round up:
Jay Suskind, director of trading at Ryan Beck & Co thinks Nasdaq has washed out but we’re still in a bear market and he doesn’t expect “another huge leg on the downside...”
Morgan Stanley Dean Witter’s Philip Roth said that it is not necessary for a decline to end climatically and, indeed, some bottoms are built amid dullness over time. “But one or the other is needed and until one or the other is clear, bottom fishing can be a dangerous affair...” adding “The combination of partially improved sentiment indicators, with an oversold condition, suggests a temporary rebound is nearby,”
Merrill Lynch chief market analyst Richard McCabe said he thinks investors should use pullbacks to accelerate share accumulation...“Sentiment indicators continue to improve this week, particularly the CBOE put/call ratio. This indicator is showing its best performance since the late summer-early fall of 1998 when the market was bottoming..”
Salomon Smith Barney’s global strategy team upped the U.S. equity market to a “market weight” from “underweight.” saying “Give our sense that there may be another 5 to 6 percent downside risk to the market, the risk’ reward ratio is becoming more compelling. Further, in view of the likelihood that the Fed will come in to sustain consumer confidence, the picture is beginning to brighten...”
Well let’s wait and see what the triple-witching brings tomorrow and take it from there then...
Riz
...well at least in spirit..