Intriguing, because I think this reaction bodes well for a fall recovery in many of the highfliers that have taken a pounding this summer. Investors are likely to be somewhat more cautious, asking for real earnings and plausible plans to ramp growth. But it appears from this vote that the core of technology investors, whose support is critical for this group going forward, aren't about to abandon potential winning stocks from the revolutions in wireless communications, optical networking and electronic commerce that are reshaping the economy. The fundamental belief in those trends appears unshaken, and these investors appear willing to pay up to be part of those trends. That's an important indictor to me.
Fundamentals point the same way.
All in all, I think the battered technology sector is positioned to do much, much better in the last three to four months of the year. That's good news for Jubak's Picks. This will work out quite well for me if these stocks come roaring back the way they did in this same period in 1999. If this scenario is correct, I think it's pretty clear what an investor ought to be doing. Add new positions from among the technology stocks with the best relative strength, using cash raised by selling stocks that didn't come through the downturn in very good shape.