SAN FRANCISCO -- The anecdotal evidence in the aftermath of
Friday's wipeout was that individuals were eager -- although not necessarily anxious -- to buy into the selling. Nearly everyone I spoke with over the weekend -- covering nearly all levels of sophistication among individual investors -- said essentially the same thing: The heavy selling of the past few weeks had created a buying opportunity. (Hadn't it?)
The more aggressive of that group was embodied by
of Seattle, who emailed the following late last week:
"For most of the last decade, and especially the last two years, we've been bombarded by a steady parade of Wall Street experts who are telling us that the technology stocks are bogus and overvalued. In the meantime, our Qualcomm (QCOM) - Get Report has gone from 5 to infinity and beyond, we bought a house (cash) on what we made in Microsoft (MSFT) - Get Report, and our kids are attending college on the Mom and Dad scholarship in what we made in the last three months of last year on (insert your TheStreet.com New Tech 30 stock here). Since they've been wrong largely for a decade, why should we believe them now???"
Friday likely knocked some of the bravado out of folks with a similar sentiment. But clearly, that viewpoint re-emerged Monday as solid interest in tech favorites such as
climb from some scary pre-opening indications.
After opening down to as low as 3227.04 and then bouncing to as high as 3454.70, the index retreated back below breakeven again before surging higher. The index closed up 217.67 at 3538.96.
Although the day proved not to be another "Black Monday" as many feared it would, there's still scant evidence any sort of true bottom has been reached. Notably, market breadth continued to be dominated by losers.
Also, the complacency exhibited by my friends, family and the folks on my flight back from New York has emboldened those who've been betting against the market.
"We haven't bottomed and people are going to get seriously hurt," said one hedge fund manager. "They got lulled into thinking you always buy the dips -- well, the game has changed. The easy money has been made. It's back to reality."
The source, who requested anonymity, had been an avowed tech bull until around mid-March, when he recanted and went mainly into cash. He's since played from the short side a little bit but is currently "just waiting to let the market tell us what to do."
Calls to a few other short- and would-be short-sellers today revealed a similar outlook -- that they may not be aggressively pressing those bets, but they're not covering them either.
Still, I wonder if the rally in the final hour today wasn't spurred by shorts who decided to do just that. Or if the action will compel them to do so tomorrow.
Aaron L. Task writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at