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Market Comment |
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It's been another gut wrenching week
in the NASDAQ with the Tech Wreck continuing. We've spent
a lot of time watching CNBC this week, which is probably the predominant
source of financial news for today's market watchers.
In case you were wondering, CNBC
officially
declared a Bear Market yesterday. This official
Bear Market
was triggered by the NASDAQ falling more than 20% from its high
during the first week of March. Anybody that owns any speculative
stocks knows that we have been in a bear market for several weeks now.
Money has been flowing from the high
flying NASDAQ technology stocks into the old economy stocks that
were dead in 1999. Capital has flowed into Financial, Drugs, Oil,
and Retail stocks. These groups performed very poorly in 1999.
This divergence had to be corrected, and the market has complied.
There don't seem to be a lot of sellers
around anymore, just an absence of buyers. Traders and fund managers
are waiting for the technical signs to develop that will signal the bottom,
and confirm that a turn around is in place. Many of the high flyers
that have fallen to 1/4 or a 1/3 of their previous highs will rebound dramatically,
probably regaining about 1/2 their loss.
This will happen in the mid cap NASDAQ
stocks
first, with the small and micro cap stocks following behind. By then
there will be no sellers left, and stocks should be able to regain their
upward momentum.
We cannot pinpoint exactly when this
will happen. The smartest technician we know believes that the
NASDAQ needs to test 3711. If that level does not hold, then
he believes the next major level of support could be as low as 2900.
Another drop of this magnitude would create additional pain and suffering,
but he believes that this scenario is highly unlikely.
CNBC continues promoting the
concept that last week's low needs to be retested before buyers will come
back into the markets. We believe that it has become a self fulfilling
prophecy. Buyers will not be back in any significant numbers before
they are convinced that all the sellers into the rebounds are exhausted.
Then the market will get healthy again. We believe that there is
a substantial amount of capital ready to come poring back into stocks once
a firm bottom has been established.
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Future
Profile Releases |
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We are going to let this bottoming
process in the market run its course before releasing any new profiles.
Right now we have three companies lined up that we believe are excellent
candidates for profiles. However, we have a reputation for our profiled
company's stocks to trade well in the short term, and we are going to do
our best to continue that trend. The companies we bring you
will continue to be speculative and we will definitely have some losers,
but nearly every company we have ever covered since the beginning of 1999
has traded at a substantial profit from its profiled price. Our best
has been NetSol International (NASDAQ: NTWK) with a 1835% return at
its high. The worst was US Microbics (OTC BB: BUGS), with a 9.94%
return at the high. Click
Here to go to our profile tracking page for the complete picture.
We have scheduled our next
profile release for Friday, April 28th. This should give
the market enough time for this correction to run its course, and stocks
to generally be headed back up. Time will tell if we are right.
We are very excited about the next profile. It's a technology
company with excellent growth prospects. We are also very excited
about the entry levels for these stocks that the market has provided for
us.
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Other
Upcoming Events |
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There isn't much substantive news
coming out of the companies we follow at the present. Most of them
are holding off on major announcements until the market improves.
Right now news would be falling on deaf ears.
In the interim we are going to bring
you some exciting benefits. We are very close to concluding
negotiations with one of the country's leading ISPs. We are bargaining
for substantial price breaks for our members that would like to upgrade
from a dial up internet connection to DSL broadband internet access.
If you are still accessing the internet through a dial up modem, you have
no idea what you are missing when you have a high speed connection.
We are going to make that affordable on behalf of our membership.
In addition, we are going to provide
you with some brief background information on a private placement ground
floor opportunity that you can investigate. We had an overwhelming
response to our last Private Placement opportunity, and we expect the same
here.
In the interim please recall that
we have had several corrections of this magnitude over the last five years.
Each time the market rebounded led by technology stocks, which is where
you will find the most prolific growth. The best time to buy is when
the
world is convinced that stocks will never appreciate again. |
