To Gun Or To Shun
Sentiment
clearly changed Friday, and not just because the Naz subtracted 4%.
The bad-news-is-good-news vibe, which
necessarily must be the norm before any bear goes back into hibernation, was
reversed Friday, similar to what transpired during Thursday and Friday of the
prior week.
As a result, National Semi
(
NSM |
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PowerRating)
warned, and the stock promptly sold down 9%.
Further, Silicon Storage
(
SSTI |
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another semi, disappointed, warned, and lost 10%.
Other techs, like Computer Network
Tech
(
CMNT |
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(
CMTN |
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(
STLW |
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40%, 24%, and 7%, respectively, after warning.
The latter three are not semis, and
therefore aren’t as important to deciphering sentiment due to their groups’
laggard posture.
But they do have some meaning. And
that meaning is not good.
And another breakout failed, this time
Alliance Capital
(
AC |
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PowerRating), downed on volume six times normal.
The backdrop does contain two
positives.
One has to do with the Fed cutting
rates.
The other, with the constructive
action in the semis. For the most part, this segment has been shaking off bad
news for the past few weeks. That’s indicative of a sold-out situation.
But it is still not yet time for the
intermediate-term trader to move off the high cash position raised in ’00.
Now, a heavy cash position may not be
exactly exciting.
However, successful trading isn’t
about excitement necessarily.
It’s about the constant challenge of
assessing risk versus reward.
To gun it, or to shun it, or something
in between.