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Dr. Kris has two degrees from MIT because one just wasn't enough. Her life goal was to figure out the universe and having done that (at least to her satisfaction), she decided to tackle something even more difficult—the stock market. Applying the scientific method along with an insatiably... More
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  • Intraday Market Notes: Tech's Tops! -- November 19 2 comments
    Nov 19, 2012 5:55 PM | about stocks: GOOG, XLK, NOK

    3:55 pm ET: Congress goes on vacation for a week and half and suddenly all's right with the world. The risk-on trade came through with a vengeance but that shouldn't have been a huge surprise given last Friday's bottoming tails. The market was temporarily oversold and was looking for any excuse to rally. The question now is whether or not this is the start of the Santa rally or merely a pause in the slide.

    If market internals are any indication, today's pop may be just a temporary phenomenon. The VWAP's (a measure of institutional buying and selling) are showing lighter than expected buying pressure (considering today's big move) and heavier than expected selling pressure. The VIX took a nose-dive which is bullish on the surface but it's getting close to 15, a level that represents lower support. True, the VIX can stay at low levels for quite some time but it can also rebound. Neither one of these indicators is pointing to an imminent reversal, however, but it is something for the bulls to consider when determining position sizes (e.g., less is more).

    Today's turnaround was most evident in the tech sector. Both Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) rebounded 6.8% and 3.3% respectively. This bullishness was reflected in the tech etf (NYSEARCA:XLK) which halted its recent decline by advancing 2.6%. More importantly, Yahoo! (NASDAQ:YHOO) vaulted over $18 resistance and is looking to test $19. A break above that would be a firm indication of a continued rally. In the "hope springs eternal" category, investors are buying up cellphone makers Research in Motion (RIMM) and Nokia (NYSE:NOK) perhaps in hope that their newly designed smartphone products can take a bite out of Apple's and Samsung's dominance. It's always nice to have choices.

    Note to Subscribers: There are two new Channeling Stocks. The Channeling Stocks list will be cleaned up in the next day or two so if you'd like to keep the current list, please make a copy. (The stocks that are no longer channeling will be cleared.)

    Themes: tech Stocks: GOOG, XLK, NOK
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Comments (2)
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  • Rickthegeek
    , contributor
    Comments (118) | Send Message
     
    Hope is not a very good investment strategy as you know. What is getting brushed aside is how many companies this past quarter have missed on estimates. The last I heard over 60% have missed. Everyone has known for quite some time that sooner or later this fiscal cliff was going to catch up to us. The kicking the can down the road phenomenon will no doubt have it's day of reckoning sooner or later. The gamble now is, is it just around the corner or can we string this all along for another 6 months or a year.
    20 Nov 2012, 12:23 PM Reply Like
  • Dr. Kris
    , contributor
    Comments (319) | Send Message
     
    Author’s reply » Rick,

     

    Analysts and the companies themselves were all predicting lower Q3 numbers due to the global contraction. It wasn't brushed aside as it was already a given.

     

    You're right in assessing that the real question is when the day of reckoning will be. Given the current "kick the can" mentality, I'm expecting the Day will be postponed for as long as possible.

     

    Just my two cents. And thanks for your views!

     

    Dr. K
    20 Nov 2012, 01:52 PM Reply Like
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