[RT] The morning after: End of Tech correction?

[Gwenael Gautier <ggautier@xxxxxxxxxxx>]

System traders, please delete, this is pure speculation talk.

I was a bit early bailing out of the markets, and some stocks are barely
back to where I sold them initially, but some are also down 50% and
more. I kept what I hadn't sold then, I don't believe it is really
useful to sell now, and am wondering about the immediate future.
Currently I look at:

1 - shape of correction: After initial low in march we got a new high
and then a big drop to a lower low, now a big rebound. In Europe we got
plenty of double tops and H&S with broken base lines, but uncompleted
targets. Question: Was that the whole ABC (irregular) correction (with a
higher intermediary high)? or was this only leg A down from the last top
with some B to correct upwards and a new C to lower lows? or may be even
A down for the first leg of a huge month long triangle to shape up in
the markets until later in the summer...?

2 - flow of money: It seems margined players were pushed overboard this
week, while long term retail holders stayed put, not selling - and not
buying. At the same time (tech) funds had still inflows last week which
they (partly) used to buy into the last bottom, some confessing with
quite some fear. For this week there doesn'T appear to be significant
fund outflows.

We'll see, but from this perspective, the rout is over short term. There
should be a retest of lows as bargain hunters shoot back stocks with
quick 20-30% gains, but if lows hold we should be good for the
resumption of the tech move up.

Long term, I remain convinced tech is there to stay and that the current
upheaval is one of those points we will look at as "I wish I had bought
there". I don't know if we'll see much lower levels, I don't believe a
fast rise back would be sustainable, I do believe the current 3 day big
gainers on big volume will be the outperformers of the next six months.
I believe further leaders in old economy fully embrassing new tech,
leaders in net infrastructure plays, wireless plays, chip, biotech,
preferrably big and with strong cash flows will be the big winners...

Just so we get some ideas flying...

Gwenn