investors have been playing the short side lately and this has been a good choice considering the media headlines and negative sentiment. However, I think it may be time to reduce shorts even though tech stocks may still be somewhat overvalued. In the next week or two high profile warnings will be over (it may have been over last week since MSFT has no intention of reducing guidance).Lack of negative news , interest rate cuts , stabilised to lower energy prices leading to lower inflation , two trillion dollars on the sidelines ready to invest in tech stocks(this money would not be on the sidelines if it was going to be invested in old economy stocks), and the market sensing tech recovery of earnings in Q4 or Q1(2002) would commence a reversal beginining in late March or early April. Remember , the market discounts events 6 to 9 months ahead.In January the market moved up very quickly on the belief that earnings would improve by Q3. If a recovery in Q4 or Q1 looks promising the next rally will take the NAZ to 2700 very quickly (forget the fact that tech stocks are overvalued , that 2 trillion dollars still wants to go to tech stocks for now) . If 2700 holds based on a better outlook for earnings as comparisions get easier , the NAZ will move to 3000. I don't think it will go higher than 3000 by year end , but that's still a 50% increase in the QQQ from here.The NAZ would only continue it's descent to 1500 from here if any improvement in earnings is a year or more away.I sense that money was allocated in many IT budgets, but these companies held back this quarter because of all the fear and concern about a recession.If this concern is removed, then earnings will rebound quickly for a lot of companies and share prices will rise quickly.