Very interesting after hour action in cisco. I was listening to the first part of the conference call and everything was fine. They made the numbers and the stock was rising a little. I left and came back an hour later to find out it was down 8% or so. The crux once again was guidance. As usual lately the guidance going forward was tepid. It is unlikely any company can escape the negativity right now. The crux is that the E in the P/E ratio is open to interpretation and is not very reliable right now.
This is great news for me as i'm short right now. As always the difficult part for me is to switch over to a more bullish tone when necessary. I'm starting to think that some of these stocks are really getting cheap, even if you whack off 20% in future earnings. The problem with bear markets is that you can never tell how far down we will go.
So i will look to the charts to show the way. If we hold the recent lows we could setup for a nice double bottom which could lead us into a steady increase in stocks over the next few months. This sounds counterintuitive, as we will still be in or just entering a recession, but it is just too easy right now to just short any stock before they report and make a chunk of money. This game will get played out soon.
As far as all the old and new horsemen? I think they all are dead.
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