Overheard On The Street
Here’s what they are saying at mid-day:
Ricky Harrington, Senior Vice President
and Technical Analyst: “This is now the fifth month that the Nasdaq has
been under pressure. We’re down about 46% from that Labor Day peak, and from any
estimation of overbought/oversold indicators, we should be very close to a
technical rally. There is a multi-year uptrend line that comes in at
approximately 2100 on the Nasdaq Composite. By a multi-year uptrend line I mean
a line connecting various lows that have occurred in the late 1980s and 1990s,
and that comes in at 2100 and should act as a significant support level. At that
2100 support level, it would mean that it was down about 60% from its high and
certainly I think it would be capable of some kind of technical rally from that
point.
Now on a short-term basis, we’re now entering the earnings season. What we
really need to have happen is for one or two key companies to report earnings
and have the market’s response to those earnings be positive. For example,
Motorola reports the middle of this week, and if the market report to that or
even Yahoo!’s earnings is positive, then that would indicate the market has
reached an oversold condition strong enough to support some kind of technical
rally. When the rally comes, the Nasdaq could possibly get back to 3000, but
that still doesn’t change the fact we are in a bear market.
Paul Rabbitt, President,
RabbittAnalytics.com: “Our
Advice — look across the valley of economic doom and earnings disappointments.
Rarely do stocks go down when the Fed is easing. This sell-off will end.
Our best case is the market wanders for a few weeks until the Fed cuts
rates another 25 basis points on January 30, and then a solid rally begins.
Our worst case if the fed passes on a rate cut at the January 30 FOMC
meeting, is that downward pressure will subside once the Q4 earnings reporting
season is over in mid February.
Then investors will breathe a sigh of relief and begin looking forward
toward economic recovery.
While the economy will likely slow for another few quarters, the stock
market will “look across the valley†to the third and fourth quarters when
earnings will re-accelerate.”
Brian Belski, Fundamental Market
Strategist, U.S. Bancorp/Piper Jaffray: “If
last week was truly a barometer of how the rest of the stock market’s year is
going to be, sales of stomach acid medicine should continue to rise prominently.
Let’s face it, the lessons of
2000 are not going to vanish just because the Fed came to the rescue.
Yes, the trend has changed regarding interest rates.
But the market is still feeling the after effects of the prior Fed cycle
(i.e. tightening) and its fundamental effect on earnings (a topic whose heat
will turn up considerably over the next several days during the Q4 CY/FY
earnings crunch).”