The Nasdaq has fallen almost 6% from its recent high after outperforming for most of 2009. The weakness started after Intel reported great earnings and the stock essentially went nowhere. Then, we had IBM’s earnings. Same thing. Last night, we had Apple report earnings and Amazon will report later in the week. Is the Nasdaq ready to bounce?
You can see from the picture above of the Nasdaq that the breakout we had in late December around 2200 has held in the last two days. I think the combination of Apple’s earnings, the big Apple release tomorrow, and Amazon’s later in the week could provide a bounce. Technology is really hitting on all cylinders right now. But, the market was very overbought when Intel & IBM announced their earnings a few weeks back setting us up for a fall. We have gone from overbought to oversold in just a few days. There are definitely some negative fundamental issues to deal with. But, technology to me is still the place to be. Perhaps shorting weaker areas like financials against technology makes sense. I believe the excellent fundamental news and the trickle down from the Windows 7 release will lift tech at some point soon.
Karl, what’s your thoughts on the commodity sector (oil, gold, coal, grains, & nat gas)? Like financials they’ve been taken out to the wood shed. I can’t believe with all of this money out there they will stay down for long.
Long AMZN but looking to short Apple unless the Tablet is the real deal. The CC mentioned talk of the Halo Effect with Macs, Apple thought or felt there wasn’t much of that, I totally disagree in my opinnion that is the goal of these wonderful gadgets (iPod, iPhone, & iTablet) it’s the Apple Experience with the Mac being center piece!! Any thoughts?
Karl,
Very glad to have you back. As always, it’s very helpful.
Bests, Bill
Justin,
I think commodities are going to be volatile because there is such a disagreement regarding interest rates and the dollar. That in turn affects dramatically the price of commodities, etc. I’d say as usual, when nobody believes they can fall, sell them and when the world doesn’t think China will buy any more and the price has fallen, buy them.
As far as AMZN & AAPL. They are both the real deal and dominating. All of these gadgets Apple is coming out with are meant to co-exist with one another. That’s exactly what happened with the Ipod affecting Mac sales to the positive. I think the tablet will start a new category and will help Apple sales in other ways. As far as Amazon, yes the tablet could hurt the kindle but Amazon is becoming a dominant retailer and retailing is very difficult right now. Online is the way to go and Amazon has earnings this week so I definitely like it for a trade.
Thanks Bill. Glad to be back.