Tuesday, October 20, 2009
Tech Soars on Earnings, then Sells Off
The trend lately has been for tech companies to rally into, and sometimes just after their earnings are reported, then they sell off. Intel, for example, blasted estimates and rallied hard, but since then it's traded down quite definitively. Same with IBM and RIMM, although their earnings were worse off. But it goes to show you, good or bad earnings, these stocks are peaking. Apple and Texas Instruments posted great earnings tonight, and it should lead to a solid Tech rally in the morning. But look at the charts above of the stocks I just named and then ask yourself if this "earnings euphoria" will last? Is it the start of new bull run? Without the big dogs in Tech carrying it higher, what's going to do it? Apple is going to make a significant new high tomorrow, but are they really that much better off? Now what?
I just want everyone to look deeper into the action here, and see that it's all fluff, smoke, mirrors, and window dressing. These stocks are being sold whether their earnings are good or bad. People are just dumping them. I'm getting the feeling that earnings will be the last "blow off like top" that will finish this rally.
Hang in there, the big daddy wave 3 or C is coming soon. And although it's been a very long hard painful battle for the bears, once the decline starts, the bears will be happy quickly. Until then, enjoy the circus around earnings and the cartwheels from financial managers on CNBC.