The Week ahead

A Crucial Week

The week ahead is critical and it is very simple. There have been enough signs that profits are going to recover to justify the markets continued momentum. Next week will show us whether the bear market has finally ended.

Dell Computer released good results last week and predicted that revenues and profits would be better than lowered expectations in the quarter ahead. This is after giant Cisco blew away estimates the week before.

Last week Hewlet-Packard(HPQ) released results that after being combined with Compaq show a very powerful and profitable company has been born. Link that up with economic data that is not too hot and not too cold, there is not a rate increase in sight.

If the market pulls back a little, write it off to technical trading, perhaps a little profit taking. If it gives it all back, we are still in a bear market with no real explanation. Unless you want to look back to a column we wrote in 1999 about a fundamental shift in valuation.

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Shmuel Protter
investmenttool.com