actio-et-reactio
Balance is but a brief transition between extremes.
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Tuesday, May 14, 2002
a few quick notes
The last joke is always on us-- the market doesn't often let us win for long!
- We got "the 3rd island" alright, but not what most expected!
- When there is little "obvious" catalyst, find one: Retail sales, announced 8:30am, month-month change and actual versus consensus were both significantly higher...and futures lead the charge
- OE week is often volatile, so bewary of position trades
- Price is back in the "mania" fork, but there is strong gap resistance from the Oct01 gap 1305:1334.
My Very Big Picture view is that tech is generally overbot and that small caps techs, once a refuge, are also now overbot. I believe the fundamentals set the stage, but price is the only action. Fundamental weakness derives from overvaluation and sluggish growth (when there). Note that although today's retail sales bodes well for growth, such a rapid gain may pressage rate cuts, which in the end might undermine sustained market gains. So, IMO, these fundamentals, however simplistic, do not favor a return to a bull tech market at this time.
One cannot dismiss that the love of tech is still strong and may provide interesting trading opportunities. Focus attention on what they DO, not what they say. Or as Chick Hearn and John Wooden knew, keep your eye on the ball and their hips, not their eyes!
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
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