Microsoft and Google Weigh on Stocks but Volume Fades
July 20, 2008
Missing analyst estimates sets up the stock to get hammered, MSFT and GOOG did just that. Both stocks were tremendous laggards and were the majority of the reason why the NASDAQ was down over 1.2% for the day. The bright side, volume came in lower than the previous day. Options expiry failed to boost volume as it has done in the past. Friday marked Day 4 for the NASDAQ and Day 3 for the S&P 500. If we were to see a distribution day prior to a follow-through day it would spell trouble for our attempted rally. We are still searching for a follow through day beginning Monday.
Regardless of my opinion (I don’t think we are in a new bull market) if we do manage a follow through day I will gladly take it. At this point we do not have a leadership group in place. Oil stocks were our leaders and with the IBD100 in negative territory is leading me to believe we have quite some time until we can restart a new bull market. We’ll be able to spot a new bull market, it’ll be when new leadership groups will start showing up.
My position here is to keep a LARGE cash position. There is no need to be a hero in this market. I want to have as much capital hanging around to put to work during a new bull market. Be patient.
Enjoy
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