Spazdaq!

  • January 10, 2001
  • Goran Yordanoff

After some early indecision created by yet more downgrades in the tech sector, the Nasdaq Composite gave us another crazy ride today. Like a bad airline passenger who takes 20 minutes to make up their mind on whether they want the chicken or the pasta (in coach, no less), the Nasdaq
gave us some wild swings intraday as it couldn’t decide whether it wanted to stay green or
sell off. 

With the 2520 level in the Nasdaq cash turning the market back late this morning just as Cisco Systems CEO, John Chambers, confessed that a slowdown in capital spending would affect his firm, it felt like the sellers would take control once again. Perhaps, JDSU was the
“white knight” today as the company came out and confirmed this year’s guidance, dispelling rumors on the street that they would miss. This seemed to give the market some firm footing and helped propel the Nasdaq to close near its high of the day. Stocks in the fiber optics sector such as
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JDSU |
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SDLI |
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SCMR |
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CIEN |
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GLW |
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ONIS |
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NUFO |
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A 5-min intraday chart of
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JNPR |
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As I suggested yesterday, not pressuring yourself to
“manufacture” a trade was the way to play this type of action. As there was a tremendous amount of “news” that affected the tech sector today, you had to be on your toes if you had any open positions.

Aftermarket,
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YHOO |
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Yahoo! could hurt the Nasdaq Composite any further. This market was bidding up YHOO when it was over $200 a share along with multiples of other internet stocks that made
no money and didn’t really have any projections of when or if they ever would be profitable. 

Not too long ago, influential analyst Mary Meeker called YHOO “the next Microsoft.” YHOO is still a profitable firm and has a legitimate business model. The market has some soul searching to do in order to find legitimate valuations in the internet sector. I don’t think this problem will spill over to the rest of the Nasdaq.

Watch List:

Excellent action today in the fiber optics sector. JDSU, SDLI, GLW, CIEN SCMR all look good for more upside.

Looking for a retracement of recent losses in the biotech sector and select genomics stocks.
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HGSI |
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PDLI |
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IVGN |
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GENZ |
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Various semiconductors look very positive here as well.
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IDTI |
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CMVT |
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AMCC |
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ADI |
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DTPI |
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XLNX |
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PMCS |
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Shorts: None tonight.

Good luck!

Goran