By James Langton
(May 9 – 09:10 ET) – The “salad days” of tech stocks may be over says Richard McCabe, Merrill Lynch’s chief market strategist.
McCabe suggests that NASDAQ is struggling. If it doesn’t move decisively to the upside soon it will likely remain weak for some time, he predicts. But, technical factors do not indicate that the market has yet bottomed. Until it bottoms the market is not expected to be able to manage strong gains, he says.
The market’s current technical pattern indicates that the NASDAQ may go through some decent rallying periods, but “it is not likely to regain the extraordinary outperformance position which it held over the NYSE for quite a while.”
The broader market is making progressively higher lows, indicating that some of the broader market, or “old economy”, stocks that have been languishing in this tech mania are starting their own recovery.