Mixed Signals

The market is sending mixed signals this morning.  I've been reading and hearing where a good number of technicians are seeing at least another 5-to-10% downside in a continuing broad-based market correction.  Some I've read are even saying that the rally of 2003 was nothing more than longer-than-average bear market rally, and that we are in fact still in an overarching bear market.

On the other hand, the fundamentals of the economy look to be exceptionally strong.  There are plenty of market analysts and economists who say quite unreservedly that we are in the midst of a booming economic recovery, and the picture they paint is rather like that of a land flowing with milk and honey.

The emerging markets as well as the European and Asian markets overnight have all experienced pretty strong sell-offs, with Japan being hit especially hard.  The Tokyo Index, or TOPIX, suffered its biggest drop since Sept. 11, 2001, falling 5-2/3%, and the Nikkei broke the 11,000 support level, dropping 554 points (nearly 5%) ending the day at 10,884.70.  The Nikkei has given up over 1,200 points in the past six weeks.

So far this morning the futures on the U.S. major indicies have been weak but improving.

I have to seriously consider going to all cash here until the market gets a more solid footing.  I've even thought about taking a few short positions.  It's a tough call.  The market just might turn on a dime this morning and break to the upside.  It's going to be one very difficult day to play, that's for sure.

OVTI S.A.R. Parabolic Triggered

On Friday, May 7th, the Wilder Parabolic point to go long OVTI was triggered.  It will be interesting to see how this plays out.

Elaine Garzarelli

Here are some tidbits from Elaine Garzarelli's last newsletter of April 15, as reported by Smartmoney.com:

Predictions
· Although the stock market may not rise as fast as it did before the bear market began, Garzarelli expects gains in certain sectors to outpace the increases in the S&P 500 index. Her largest overweight positions are in financials, basic materials and consumer cyclicals. (Garzarelli Capital, April 15)

· Garzarelli believes there's "a good possibility" that economic growth will slow in the second quarter relative to the first. Potential drags include higher mortgage rates, a decline in refinancing activity, rising oil prices and slowing money-supply growth. (Garzarelli Capital, April 15)

· The strategist downgraded two industries this month. Due to recent price appreciation, she reduced newspapers to Neutral from Attractive and electric utilities to Unattractive from Neutral. (Garzarelli Capital, April 15)

OVTI at JP Morgan Technology & Telecom Conference

It was a good and an encouraging presentation; very positive.  If you're contemplating buying this stock or if you already own it and wonder if you should hold (or add), you really need to listen to this presentation which includes an informative series of slides.  It's supposed to be archived at the JPM site, but so far the link doesn't appear.  It should be there shortly I imagine.

Meanwhile, a guy over on the Yahoo message board took some good notes you may want to read.  And by the way, Mr. Rossi did in fact state that they would hold their next conference call on Wednesday, June 9.  I'm taking this to mean that they will release their earnings report after the market closes on Tuesday, June 8.  This is very good, because I'm holding some June call options that expire on the 18th.  I like it.

It's Been A Bloodbath Lately

Let's not kid ourselves.  Last week was brutal for anyone like myself who tends to be long in technology stocks, and in the semiconductor industry in particular.  All my stocks got hammered hard last week, including my newest holding, Imclone, which I bought on the news of its super-spectacular earnings report.  It truly was a bloodbath of epic proportions.

I'll admit it.  I'm scared.  But I bought the stocks I own for fundamental reasons, and I think fundamentally all the stocks I own are still sound.  I'm not selling.

I'm breathing a measured sigh of relief today as it appears the worst may be over.  (Although it would be nice to see a little better volume on today's "rally".)  I listened to the NTE conference call this morning, and I got the feeling that the company is still on track for good growth, despite its recent major sell-off in the market.  There may be a little downside left, but I stress, a little.

Here's something that might help move OVTI tomorrow:  I see that Business Wire is reporting that CFO John T. Rossi will speak at JPMorgan's 32nd Annual Technology & Telecom Investor Conference at 3:30 p.m. PDT (6:30 in the east) today at the Westin St. Francis Hotel in San Francisco.  You can listen to the live webcast by going to http://equityconferences.jpmorgan.com/.  If you miss it, you will still be able to hear it, as it will be archived.