It's Friday the 13th. I admit, I'm a little superstitious. And I try
not to read too much into the market action of the moment. I do
wonder, though, about the notable strength in tech stocks for the
last two days. Investors are clearly rotating out of energy and
cyclical stocks and into tech. Today, it was good earnings news from
PC maker Dell and chip maker Nvidia that helped boost the tech
sector. This follows the positive earnings news from networking gear
maker Cisco Systems on May 11.

How long will the strength in tech last? Fund manager Jerry Jordan
recently href="http://www.businessweek.com/bwdaily/dnflash/may2005/nf2005053_4323_db006.htm"target="_new">told us that he eliminated his long
positions in oil stocks, as well as his basic industry and materials
stocks, in favor of large-cap growth companies. When we asked him if
it's time to buy large-cap tech stocks, he said: "We believe the time
is now." He must be smiling right now.

My blog partner Amey Stone just sent me these interesting stats from
Michael Panzner at Rabo Securities. He says:

"Based on an analysis of data from 1972 through 2004, there appears
to be a distinct ebb and flow in the relationship between the Nasdaq
Composite Index and the S&P 500 Index.

In general, the Nasdaq Composite tends to outperform the S&P 500 from:

  • January through February (that is generally the strongest period)
  • Mid-April through mid-July (the current period)
  • Mid-August through mid-September
  • November through early-December
  • Mid-December through year-end

In contrast, the Nasdaq Composite tends to underperform the S&P 500
from:

  • March through mid-April
  • Mid-July through mid-August

  • Mid-September through November

  • Early-December through mid-December"


There's some food for thought on this freaky Friday. Let us know what you think.
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