Suddenly everybody's a tech-stock bargain hunter as investors decided Tuesday they'd had enough of the blues and bought the NASDAQ up 177 points by the close. Cisco cleared its personal floor of $50 again, Oracle hit $34, and dot-commers Expedia and eToys got a few bonus points for losing less money than everybody expected. Is this the floor of floors?
Would you settle for "possibly"? Last week traders were buzzing that "there's no such thing as a quadruple bottom," meaning that three times in late May, mid-October and late last week the tech index has flirted with 3,000 and jerked back from the brink. Add to that the end of October traditionally the month of earnings news, tax-loss selling by mutual funds and bottoms (not a coincidence) a Dow afire for three straight sessions and an election about to conclude, and we've got indications that the 3,000 milestone may belong in NASDAQ's rearview mirror.
On the other hand (in the markets there's always another hand, usually a fist), if this really is an investing world again, where valuations and P/E ratios count, there are plenty of companies like high-flying Juniper Networks whose numbers are way too high. The companies have delivered on their earnings that's why they're still flying but by the usual, pre-bubble calculations these guys may not be quite done with their comeuppance.
The word is "capitulation." The bloodbath of bloodbaths, in which investors tear their hair out and run shrieking from the room. Traders insist that while there has been tech overselling this month overselling that was drawing buyers Tuesday it just doesn't feel like it's run its course. Not to mention that every one of NASDAQ's 5 percent days has been met with selling soon after.
Give this one another couple of days. Until the election. Or maybe until December, when the Fed meets. Possibly spring. Then we'll definitely know for sure.