Jan.
17 Hotline
(Jan.
17, 2000)
This
is the weekly market commentary that is a part of the service you receive when
you subscribe to Wall Street Winners, Courtney Smith's
stock letter. For more information click here: www.kci-com.com.
Market Commentary:
Extremely
high volatility has hit the market. Unfortunately, this is typically a sign of
a near term top rather than a bottom in the market. We already have seen a drop
of over 10% in the NASDAQ as portfolio managers dumped the stocks they had bought
in the last couple of weeks in 1999 to dress up their portfolios.
As
you know, I have been concerned that we will see a 10-20% correction in the market
that will be caused by a too strong economy leading to Fed rate hikes combined
with concerns that profits will grow slowly because of declining profit margins.
I
don't think that the correction that we had in the first week was that correction.
I look for another correction coming up in the next several months.
However,
I advocate maintaining your stock positions because the timing will be difficult
to call. I'll try to give you a quick head's up but it may be difficult to call.
It will likely be even more difficult to call the bottom after the correction.
These days, corrections are short and sharp. This makes them difficult to time.
So
the best strategy is to hold your current WSW positions. These are the leaders
in the market so will be able to withstand the correction the best. I also suggest
keeping some cash aside to put into the market when the correction comes.
