] In the face of all this, what emboldens the bulls?
] Sharply discounted share prices, of course, but also
] improving fundamentals, like corporate spending on
] technology. Forecasts for growth in corporate information
] technology spending this year range from 4 to 8 percent,
] and the bulls say these estimates may be too
] conservative.
]
] For one thing, the companies that buy technology are
] flush with cash. At the end of 1999, just before the tech
] stock meltdown, the median for balance-sheet cash and
] short-term investments at Standard & Poor's 500
] companies, excluding the financial services sector, was
] $220 million, according to data from Piper Jaffray. Since
] then, it has risen each year; by the end of 2004, it
] stood at $675 million. The share of capital spending
] going to information technology equipment and software,
] in decline for several years, has also been rising again,
] according to Lehman Brothers.
]
] Inventory levels at technology companies, meanwhile, have
] been dropping, and the ratio of inventory to sales is the
] lowest in more than a decade, according to Lehman
] Brothers data. Finally, tech companies may actually
] outperform forecasts. "Earnings revisions for the tech
] sector have been a bit stronger than for the overall
] market," said Chip Dickson, Lehman's chief United States
] strategist. If the bulls have picked up the scent of
] impending recovery, how should investors position
] themselves? Here, the bulls part ways. Some favor
] beaten-up large-capitalization stalwarts; others look to
] fast growers in flourishing niches like data security and
] wireless data services.

This should be interesting. Both forces are pretty strong. The macro economic effects seem to be much more powerful, but that might not make the market act with any rationality. For my part, I've been looking for exits out of some of my techs just because I think they're too pricey or not going anywhere (CSCO?).