Overheard On The Street
Here’s what they’re saying at mid-day:
Peter Eliades, Editor and Publisher,
StockMarketCycles.com: “To me the most truly remarkable and stunning aspect
of the market right now is the market sentiment as expressed by the survey by
Investors Intelligence. They survey about 150 to 160 newsletters every week. In
the face of this incredible decline, particularly in the Nasdaq, we have the
last couple of weeks continued to see 55% of investment advisors bullish. It’s a
remarkably high number. It’s close to the highest number of the year, and it’s
the type of bullish sentiment that’s usually seen after a very large move to the
upside.
“Here we have it being expressed after a very large move to the downside
on the Nasdaq. For that kind of sentiment to be seen in the face of this kind of
decline is, first of all, almost unprecedented, and second of all, I believe
it’s very very bearish. It means that we are nowhere near the kind of
capitulation that we need in order to see a good market bottom. That to me is an
incredible statistic, and I think a very bearish one.”
Bob Zuccarro, Portfolio Manager, Grand
Prix Funds: “The decline in the market has reached extreme proportions, and
it’s not a question of valuations at this point but certain technical factors
that have come into play. There’s a lot of forced selling due to margin calls,
which clearly has put excessive pressure on stock prices. There’s also mutual
fund redemptions that are being forced to sell many of their over-weighted
positions in technology stocks that are forcing the market a lot lower than it
would go under normal circumstances.
“While the decline is the second worst in the Nasdaq’s history and is
now approaching nearly 50% from its March 10 peak, most investors are very
fearful at this point, losing sight of the fact that the market is more volatile
on the upside than the downside. Therefore, when this market reverses, the next
move on the upside will be very violent and very powerful.”
Art Hogan, Chief Market Analyst,
Jefferies & Co.: “We’re having one of those awful capitulation days,
where if things weren’t bad enough, we get some bad news out of some pretty
premier companies, not the least of which were Gateway, Altera, and Gap Stores.
Unfortunately, a lot of the selling that has been going on in the last couple
months has been because of concerns about a slowing economy and how that will
adversely affect earnings. Well, unfortunately here we are coming into earnings
pre-reporting season, and we kick that off with a very, very ugly picture at
Gateway, Altera and a host of other companies this morning.”