So, I am looking for an IT top after January to mid Feb and I expect the IT top to be in after the middle of February to early March, it is unlikely that we should see an IT top while there is still money flowing into the markets over the next 2-3 wks. However, if we see the credit growth reversing back up, the decline should not last much further beyond than March or early April...
The dealers are also heavily borrowing, this is similar to the topping phase from the early last year, we should see higher prices in this trading range, the bias appears to be for higher prices for January first. The tech sector is due a bounce here, although another small wave of selling might come later this week...
We have now some more evidence in the prices that an IT top is approaching in the weeks ahead due to the underperformance of the small caps, I find the participants more and more speculating for the upside while the OEX options are rather getting inversely positioned...
Although there is a divergence in the IT rally in between the large and small caps, the divergence is not similar to 1997-2001 period. So, I do not expect a large decline or correction to turn into a bear market right from here...
- kisa
Edited by kisacik, 02 January 2007 - 01:39 AM.