Overheard On The Street
Here’s what they’re saying at mid-day:
Bryan Brown, Principal, Spectrum Equity
Services LLC: “The Fed has indicated that it is going to ease. The initial
move was aggressive and unprecedented. The bottom line conclusion from that move
is that the Fed is going to engineer a rally. Taken in conjunction with the fact
that the key broad-market indices, the Dow, the S&P and the Nasdaq, are all
three aggressively oversold, the odds of a rally are indeed high. The risk here
is that a rally in the Nasdaq is mistaken for the end of a bear market. It is
more likely than not going to simply be a catch-up rally, and the overall bear
market has not resolved itself in a statistically significant manner. Trading
opportunities have arisen, but this is a time to date stocks but not marry
them.”
John Roque, Vice President, Arnhold and
S. Bleichroeder: “Historically speaking, there’s no precedent for anything
we’re seeing. While that won’t make you feel any better, at least we’ll be able
to point out the errors when they air the History Channel episode. In terms of
G-7 markets, Nasdaq’s overbought reading in February/March 2000 was
unprecedented at +4 standard deviations on March 9, 2000. In terms of G-7
markets, Nasdaq’s oversold reading near -4 standard deviations is unprecedented.
Nasdaq is 33% below its 200-day moving average, the most recent extreme oversold
number is -37% from Dec. 20, 2000 and a -4 standard deviation reading would put
the Nasdaq -38% below its 200-day moving average.”
Paul Rabbitt, President,
RabbittAnalytics.com: “Technology is economically sensitive and extremely vulnerable to earnings
disappointments and earnings downgrades.Â
The technology bear market needs to drag on for a while so that die-hard
technology investors are exhausted.Â
A ‘V’-bottom reversal and rapid recovery (a pattern repeated many
times in the past six years) is less likely because of the high portfolio
exposure to technology and low portfolio exposure to value-oriented issues.Â
Position yourself now where the money will go, rather than where the
money has been.”