Today is the beginning or the end?

Riz

Experienced member
1,266 5
To me it looks like today is the end of the tech equities' downtrend..the tech buble has burst...the Nasdaq plunged to 18-month lows and is now down 54 percent from its all-time highs set on March 10 and off 42 percent for the year..Ftse techMark 100 Index from 5,753 to 2,544..thus the year 2000 starting "a spectacular popping of the new economy stock market bubble" has also been the one bursting the same buble before leaving the scene...leaving us wondering what happened or rather will happen to the new economy growth story...has the world just given up on the new economic growth?..the answer to this question and some news/analysis that didn't attract much attention because of the techs' heart-rendering screams echoing along with the sell orders going through the system...the answer is undoubtedly no, because the world can't give up on its future and the new economic growth is the future...at the beginning of the year people started buying tech equties without even thinking about valuation..at the end of the year people started selling again without even thinking about valuation...so what now?

Now is the time to appreciate both the new economic growth and valuation...the techs are the reality of our future and they will survive, pull themselves together and lead the equities race, no doubt about that...so where from here?

I think as of today the institutions will start digging in their cash piles and buying tech shares, only this time not indiscriminately...quality is going to be the most popular word around the markets for a while...just as Carsten Gerlinger, a fund manager with DG Bank in Luxembourg says:
"Traditional stocks have come down so much. I don't see the need to buy Neuer Markt stocks when I can buy Nokia cheaply...the tech bubble has burst -- but next year you have to keep an eye on quality -- on the Neuer Markt not everybody will benefit from an upturn...".

or as Schroder Salomon Smith Barney suggests in its latest forecasts for the coming year that the down move has gone far enough... "The move in government bond yields and weakness in equity markets has left the equity market looking oversold.."

Even Merrill Lynch doesn't think differently. In its forecasts for 2001 the company states that European and U.S. equities have already priced in a "hard landing" style slowdown for economic growth...

Similarly CSFB's McQuaker says:
"Since 1991, the European economy as a whole has grown at around 2 percent per annum on average. The new economy, in contrast has grown almost 4 times as fast...Given the importance growth has for longer term equity returns, we believe these differences, in themselves, give strong support to the case for investment in the new economy.."

Some commentators suggest that the shake out in the new economy in fact will lead to a stronger economic structure in the future.

Giles Keating, global strategist with CSFB in London says no differently "The agony in parts of the tech sectors is a reflection of the process of creative destruction..." thus suggesting that the shake out in the new economy in fact will lead to a stronger economic structure in the future...

That is of course another way of explaining how the institutions/manipulators grabbed the public's money...pumping in the bubble then creatively destructing it...no doubt that the destructed part is our hard-earned money...

So now that they have halved the tech equity prices, what might be their next step?
The answer in my opinion is that as of today they'll start talking about how they can't give up on new economy growth..how the cash levels are high..how the tech equity valuation looks good..how good the interest rate cut is for equities..how they expect further fall in oil prices which is already 30 percent off their highs..how attractive the telecoms sector is (after cursing the sector for a while, that's the most probable position they'll take IMHO)..and so on and on...

Mark Howdle and Niall Mcleod of Schroder Salomon already started to talk about "20 percent rise in European equities by April 2001" in a research note...for the whole year they see a rise of 26 percent by the way...

So the question now is: have you picked your techs? Only make sure they are the "quality" ones...

Thought it would be best to say this while Nasdaq was struggling to stay above 2350...


(Quotations from ftmarketwatch)

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[This message has been edited by rizgar (edited 20-12-2000).]
 

spock

Junior member
36 0
For what its worth, I agree this is close to or at the bottom for the Nasdaq and whats more important Ed Downs at Nirvana also seems to think so.I have bought Mar Nasdaq this evening and expect it to make my fortune-watch for the 100pt gap down tomorrow!!
 

Cigar

Well-known member
292 13
Perhaps the end (of this period) is nigh.
Some guy on the Etrade BB is considering giving up his day job as he's making so much money shorting shares.
Seem to have heard comments like that (other direction) back in February.
 

shelman

1
439 1
I said, months ago, on CI that i pray for the day a crash occurs and i'm very liquid.
Well, those conditions are about as good as they are going to get, i think, so now i have a simple choice...wait and see, or take the chance now... i think i'll keep you guessing.
I have my selection of stocks which are fundamentally sound and as i have always said, if the fundamentals are right you've got a chance, especially if you can wait.
Not everyones style, i know, so good luck to those brave enough.

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Riz

Experienced member
1,266 5
Well Nasdaq futures did start in blue and at the time of writing Nasdaq was up +78 to 2411..Dow up +106 to 10425...Hope the signals I mentioned yesterday in this thread are going to be those determining the trend in the markets...

FTSE-Techmark 2494.85 -49.27...obviously had to pay for Nasdaq's yesterday loss...

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spock

Junior member
36 0
Oh bliss and joy!!
As you may recall I was long of Nas and Dow and S@P having sweated overnight and at start of trading this morning.This rally was just what I wanted-It has not exactly made my fortune but certainly paid for Christmas.Now flat and waiting for higher lows to form before buying again!!
 

Riz

Experienced member
1,266 5
Spock, glad to hear that mate..any such news from members of our community make me feel so happy...only don't get carried away and be alert all the time, please...market's still full of traps in spite of good signals I try to bring to attention..good luck...

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Riz

Experienced member
1,266 5
FTSE-Techmark up +22 to 2521.05
Nasdaq up +177 to 2517

No doubt the Techmark's gains would be a few times fore than 22 had the UK market not closed at 12:30 before the US markets started... not complaining however, the point is that todays Nasdaq and Techmark results add even more credit to the signals I tried to bring to attention at the start of this thread...hoping we'll get more and more similar signals by the new year....

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Riz

Experienced member
1,266 5
I thought it would be worth to note here that The Nikkei, The Japanese stock market had its strongest rise for almost two years yesterday...The Nikkei 225 index was up 504.53 (3.76%) to 13,931.61...interpreting Friday's gains in US techs as the end of the recent slump...almost all high tech and telecoms stocks recorded a gain, as investors looked for bargain among them...Sony, NEC Corp and Nippon Telegraph and Telephone were all popular...

It is all down to growing hopes that the Fed will cut interest rates soon in an attempt to prevent an economic slow down turning into a recession which caused a rebound of 176.90 points on Nasdaq last Friday...

At the moment noone is arguing about the existence of an economic slow down..the question is whether the Fed will be able to prevent a recession...Technology indexes are vulnerable the most, that's why any hope of prevention causes such rebounds, of course the other way round would also be true...only at the moment the signals are in favour of those hoping the Fed will be able to prevent a recession..

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[This message has been edited by rizgar (edited 26-12-2000).]
 

Riz

Experienced member
1,266 5
still worth reading I think...
 

Riz

Experienced member
1,266 5
hehehe...

Steve, I know what your game..next you're going to ask me to let you have a look at them..no way.. :)

rizgar
 

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