Gast_B
08.03.2001, 00:23
Thursday, March 8, 2001 Posted Wednesday, March 7, 2001, at: 17:56 PM by waxie
YHOO warned and also lowered revenues about 35%.
Further, their business is SLOWING.
Like the semiconductors and the PC's, we believe that Internet
business is contracting, and though it will remain a viable
and lively means of doing business, we suggest that the
earnings growth, and revenue expansion for AOL, YHOO
and many others will deteriorate, margins will contract,
and the 2nd half illusion (delusion?) of a turn around will
come to pass without even a threat of one.
Though we have called this rally/bounce to perfection
as we head into the FOMC meeting on the 20th,we believe there
is no shot in hell this market has seen nearly a bottom.
In fact, we believe the chances the Nasdaq does NOT see 1800
or less, with a possible 1200 - 1500 within 18 months,
is less than 10% at this point.
Therefore, if you are still a foolish investor who owns
INTC or CSCO or SUNW or ORCL, you may wish to exit these positions
into any further advance here.
Internet security, Fiber Optics still have much downside,as do
firms like JNPR, BRCM, PMCS, AMCC, etc.
The overall problems of an expanding economic slowdown,
a public that refuses to see the truth of this stock market
not coming back to 3000 level, and still being in love
with their favorite (even as I write this CIEN, CHKP and BRCM
are all UP aftermarket for no reason).
Much to everyone's but our surprise, the contrarian indicators
still point to us selling off in a major way.
INTC CEO says he has no clue as to when his company will be back
on track and yet INTC rises $1.50 on the day, or 5%ish.
YHOO warns and based on the #s they are throwing out, they are
worth NO MORE than $5 a share (yes, $5 a share).
AOL still trades at 60 P/E and is going to be bogged down
by Time Warner, with lower margins and an internet that is contracting. Yet, after the fact, analysts will say they should
have known that if YHOO is failing, then AOL has to be affected as
well.
In the end, as I repeat nightly,only the traders will survive.
Investors will eventually capitulate, cave in and give us.
Right now we are seeing sellers on the sidelines as we head
toward the FOMC with many feeling we hit bottom.
I wish I could feel the same way, and though we are playing
long this bounce (and short). And though we are making money
on our calls both ways, we as stated think we have no shot
of going past 2450 area under any circumstances here.
Though we do not feel we will crash this second, the rallies must
be sold into, profits taken on longs and shorts reestablished
as we move higher.
We will be taking longer term short positions in our favorites
over the next couple weeks.
CIEN got upgraded today, and even based on them doing everything
correctly they will earn $1 NEXT YEAR.
So, if their business maintains, which is HIGHLY unlikely,
they are trading at over 75 X's next years earnings.
In this market envirnment that is simply disconnected and must
be corrected, and will be.
As we saw with JNPR and BRCM and PMCS and YHOO and ETYS and the
others we called and made huge on, CIEN and the likes
are simply making themselves juicier for us.
We played CIEN since Sunday LONG on our call for this bounce,
but in the end we go SHORT and rock it. They have analyst meeting
on the 12th, and FOMC on the 20th. Somewhere in between we get
them to ride them to death.
WE'll play the open once again, market wants to move higher
and is steadily doing so. SEmis looks spent, and rightfully so,
but they may still leg higher if market rallies.
Be wary from here, upside is possible, but tread carefully
on longs from here on in. We'll play them intraday, but I would
rather miss the gap ups and play it safe. As always in this market
capital preservation is of uttmost importance.
WE RULE THE FREAKIN' MARKETS!
See ya on the other side,
WAXIE
YHOO warned and also lowered revenues about 35%.
Further, their business is SLOWING.
Like the semiconductors and the PC's, we believe that Internet
business is contracting, and though it will remain a viable
and lively means of doing business, we suggest that the
earnings growth, and revenue expansion for AOL, YHOO
and many others will deteriorate, margins will contract,
and the 2nd half illusion (delusion?) of a turn around will
come to pass without even a threat of one.
Though we have called this rally/bounce to perfection
as we head into the FOMC meeting on the 20th,we believe there
is no shot in hell this market has seen nearly a bottom.
In fact, we believe the chances the Nasdaq does NOT see 1800
or less, with a possible 1200 - 1500 within 18 months,
is less than 10% at this point.
Therefore, if you are still a foolish investor who owns
INTC or CSCO or SUNW or ORCL, you may wish to exit these positions
into any further advance here.
Internet security, Fiber Optics still have much downside,as do
firms like JNPR, BRCM, PMCS, AMCC, etc.
The overall problems of an expanding economic slowdown,
a public that refuses to see the truth of this stock market
not coming back to 3000 level, and still being in love
with their favorite (even as I write this CIEN, CHKP and BRCM
are all UP aftermarket for no reason).
Much to everyone's but our surprise, the contrarian indicators
still point to us selling off in a major way.
INTC CEO says he has no clue as to when his company will be back
on track and yet INTC rises $1.50 on the day, or 5%ish.
YHOO warns and based on the #s they are throwing out, they are
worth NO MORE than $5 a share (yes, $5 a share).
AOL still trades at 60 P/E and is going to be bogged down
by Time Warner, with lower margins and an internet that is contracting. Yet, after the fact, analysts will say they should
have known that if YHOO is failing, then AOL has to be affected as
well.
In the end, as I repeat nightly,only the traders will survive.
Investors will eventually capitulate, cave in and give us.
Right now we are seeing sellers on the sidelines as we head
toward the FOMC with many feeling we hit bottom.
I wish I could feel the same way, and though we are playing
long this bounce (and short). And though we are making money
on our calls both ways, we as stated think we have no shot
of going past 2450 area under any circumstances here.
Though we do not feel we will crash this second, the rallies must
be sold into, profits taken on longs and shorts reestablished
as we move higher.
We will be taking longer term short positions in our favorites
over the next couple weeks.
CIEN got upgraded today, and even based on them doing everything
correctly they will earn $1 NEXT YEAR.
So, if their business maintains, which is HIGHLY unlikely,
they are trading at over 75 X's next years earnings.
In this market envirnment that is simply disconnected and must
be corrected, and will be.
As we saw with JNPR and BRCM and PMCS and YHOO and ETYS and the
others we called and made huge on, CIEN and the likes
are simply making themselves juicier for us.
We played CIEN since Sunday LONG on our call for this bounce,
but in the end we go SHORT and rock it. They have analyst meeting
on the 12th, and FOMC on the 20th. Somewhere in between we get
them to ride them to death.
WE'll play the open once again, market wants to move higher
and is steadily doing so. SEmis looks spent, and rightfully so,
but they may still leg higher if market rallies.
Be wary from here, upside is possible, but tread carefully
on longs from here on in. We'll play them intraday, but I would
rather miss the gap ups and play it safe. As always in this market
capital preservation is of uttmost importance.
WE RULE THE FREAKIN' MARKETS!
See ya on the other side,
WAXIE