Sometimes you can learn a lot just by reading the wires.

Take today, for example. There was a bunch of small stories that, when pulled together, paint a pretty good picture of where the stock market is and where it may be headed. They make for more significant reading for investors than a dozen Wall Street research reports.

Let's look at the details of today's news mosaic:

Telecom service provider

ICG Communications

( ICGX) filed for Chapter 11 bankruptcy. A total doughnut for stockholders who bought this baby at $32.25 back in late March. No surprise now, but it's still notable.

Why?

The credit crunch in the New Economy telecom sector is very real and likely to get worse before it gets better. Check your company's balance sheet. If you are truly a long-term investor in the sector, get out of the financial weaklings and into the strong ones.

Fancy-pants retailer

Williams-Sonoma

(WSM) - Get Report

lowered its fourth-quarter earnings projections to 75 cents to 80 cents a share. Analysts had forecast earnings of 92 cents, according to

First Call/Thomson Financial

.

The meaning here?

The hard times for retailers, even high-end purveyors, continue as consumers rein in their spending. Holiday sales are off to a slow start. Many of the retailers are cheap here, but don't hold your breath waiting for any sustained earnings-growth surprises. Is this the time to buy? Only if you are an experienced and disciplined bottom-fisher who really knows the sector.

Meatpacker

IBP

(IBP) - Get Report

says that it has agreed to discuss an unsolicited

takeover bid from rival

Smithfield Foods

(SFD)

. The offer follows a competing offer from other bidders to take the old

Iowa Beef

private. Pay attention to these kinds of deals. They will continue and can make you money. IBP has been a double from the low this year.

Why?

A price-to-earnings ratio near 9, lots of free cash flow and low (but steady) growth add up to a good night's sleep in unsteady times like these. Look for more food companies to get snapped up for similar reasons.

Leucadia National

(LUK)

surged on

news that it may take control of troubled small business loan company

Finova

(FNV) - Get Report

. Who cares? You do because the two guys who run Leucadia specialize in making money by buying good assets cheap during crises. Is it a good stock? You figure that out for yourself. But there is a larger message here -- investing in distressed securities is making a comeback. We are only at the beginning, but you should begin to think about it. If you are a pro, then you know where to look. If you are not, then look for deep value mutual funds in

Morningstar

.

The euro remains paralyzed by the election indecision in the U.S. and hangs in there near 85 cents.

My thinking is that when the U.S. finally gets a president-elect, the euro will likely remain roughly where it is. What does this mean for a dollar-based investor? If the euro simply stops going down and you pick a good company, you may finally get rewarded. To keep the overseas investing equation as simple as possible, you might want to consider industries and companies with well-entrenched positions in their markets, strong cash flow and fairly steady businesses.

Merrill Lynch

Internet analyst

Henry Blodget at long last downgraded incubator

CMGI

( CMGI) after he had recently done pretty much the same thing to comparable money pits

Internet Capital Group

(ICGE)

and

Safeguard Scientifics

(SFE) - Get Report

. The news here is not that Blodget changed his rating from long-term buy to long-term accumulate.

Other than analysts

Mary Meeker and Jack Grubman, Blodget has probably been more wrong and lost investors more money than anyone else on Wall Street. After all, his downgrade of CMGI, for instance, comes after the stock has given up a full two years' worth of appreciation. Blodget's move is only notable for what it tells you about the utility of most sell-side tech analysts in a bear market. They are useless to you -- always behind the curve and always trying to let investors down easy.

Goldman Sachs

strategist

Abby Joseph Cohen

reiterated her bullish outlook for U.S. stocks and recommended that investors return to a market weighting in tech stocks. (So did Merrill strategist Christine Callies)

"Equity valuations are the most attractive they have been all year," wrote Cohen. "Today's markets are already priced for imperfection. We believe the

S&P 500 is about 15% undervalued on a 12 month view, and our model portfolio now suggests a market weight position, i.e., 35%, in technology and telecom." Cohen is a very fine market analyst, even if she has been wrong this year about the overall market. (She's been dead right, however, in her bullish call on oil stocks.)

For my money, Cohen is best understood today as a measure of market sentiment. And that sentiment is bullish on just about everything -- tech, value stocks, telecom, you name it. Perhaps she is right. Perhaps we have seen the bottom. But with such positive sentiment, as embodied by Cohen, do you really think we have seen the bottom in the most speculative tech and telecom sectors? Historically, sentiment is not so perky and upbeat at bottoms.

It was a great day for tech with almost everything rallying strongly. The

Nasdaq Composite rose 171.4 to close at 3138.1. Will the rally continue?

Well, let's think here a minute.

Broadcom

(BRCM)

has a 12-month trailing P/E of about 390,

Brocade Communications

(BRCD)

of about 580,

Ciena

(CIEN) - Get Report

of about 450,

Juniper Networks

(JNPR) - Get Report

of about 650 and

Sycamore Networks

(SCMR)

of about 540.

Does that sound like a tech bottom to you? Or do such stratospheric valuations suggest caution?