www.ingerletter.com
...When you look at the Russell 2000, you see a parabolic move up, led by tech, which if you also take out the techs you'll find quite a different result. The point of course, is to recognize that the "market" is focused and concentrated into a couple areas as never before since the late 1800's in the rails, or the early '20's (not the late '20's), when post WWI America was looking for growth. Interestingly, there are two alternatives to resolve this; either the modern leaders are a bubble that's popped (hence they catch-down), or the downtrodden finally pick up and help bolster the nervous strength currently in the techs. We say "nervous" because even the most brazen bull is thinking this has been a bit much for techs, which are increasingly parabolic and overpriced for at least the near-term; although even in tech there are values and excess which vary considerably.
There is little doubt on our part that technology, whether optics, wireless, or new media, will still be the focus of this market in the months ahead, or even longer. What is at stake however, is the ability of this market to respond to a very clear and defined challenge at a targeted resistance in the Averages, which is increasingly difficult to overcome without an assist from stocks not yet run as opposed to those that have been run to the point of near exhaustion. That means we need to see some improvement in the internals that have been so dour in Energy-sensitive stocks (for an example), which could help capital equipment, financial, and other depressed areas to respond.
If we get that, some tech players on the edge of nailing gains will hold back, and the chances of this forecast rebound of nearly a week ago becoming something greater, will be enhanced. If we do not get a rebound in such sectors, then the concentration of capital in a comparatively small universe of stocks (though we are glad to have had quite a few) will moderately erode, and the market, as measured by the S&P 500, will again be put on the defensive. Put differently, we're looking so much at the Nasdaq 100 (NDX), which is extended and hardly corrected, that there is almost no way for the market to sustain an advance from here without some flow into older style stocks, which indirectly would bolster the confidence of holders of purely NASDAQ tech stocks...
Genau so sieht auch der deutsche markt aus.
Gruss
Scavenger
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