Using the big picture charting method shown in the previous post for a couple of indexes, we apply it to today’s star stock, GOOG and see that it is approaching a measurement of its own. If only it were as easy as calculate target, deploy capital and wait for payday.
Google, Microsoft and AMD joined Intel, which helped shave the SOX yesterday in an otherwise bullish market, in the earnings disappointment sweepstakes.
But then again, this market is all about its obsession with Fed policy isn’t it? If earnings season disappoints it keeps alive our biggest picture scenario, which is economic contraction being fought by inflationary monetary policy.
That is all I care about because sooner or later if confirmed, the correct investment themes (or lack thereof) will present themselves within this environment. One thing I will say is that inflation proponents – especially in the precious metals – did not need a blow out Google quarter and a robustly cheering US stock market. So that’s a √ in the fundamental column there.
Now, about crude oil… the next target is 110 and it needs to hold around there.
GOOG was charted several months ago showing a breakout and retest. Well, it went on and on and on and has now come to what would be the most optimistic measured target at 830. Just sayin’.
e = external link
Gold, and Dilemmas Michael Ashton 3.5.13
Obama’s Sequester Smokescreen Eric Fry 3.5.13
Why the Market is Ripe for a Major Shift Adam Fischbaum 3.5.13 e
Gold Investor Index Slips to 5 Month Low Adrian Ash 3.5.13
Real Rates vs. Gold: The Direction of Travel Adrian Ash 3.5.13
The World no Longer Needs Raw Materials to Grow Zero Hedge 3.5.13 e
Apple, Google & the Nasdaq 100 B.I.G. 3.5.13 e
I did indeed buy a little Google based on the chart shown a few days ago, for an anticipated Santa rally. It’s an okay company with a stock chart that showed it had tested a huge support zone. My favorite tech company is Apple, but I wouldn’t touch this stock with a 10′ pole. Not until the noted support area near 400, anyway.
Think about the herd that piled into this bubble. How bad will it get as more and more of them realize the bubble popped? I am sure the wise guy traders are all out and the more alert mom & pop investors. But what about that final tier folks who only peek at their portfolio every 3 months when a statement comes? If AAPL could get a quick, panicked drop to 400 it could be a good trade if the regular stock market is still strong at the time. I’ve got it on watch.
Several weeks ago we looked at the chart of Google in the newsletter after the initial hard breakdown, to gauge what may lay ahead. The idea was a hard break, then recovery, then renewed decline (i.e. an A-B-C type correction) down to massive support.
GOOG is among the things I might like to ‘long’ for a few weeks or more, depending on FOMC and its aftermath.