Thursday, January 21, 2010

Selling In Stocks Accelerated After The Details Of Our Dimwitted President's "Plan" Became Clear....

But who knows, maybe it's just rhetoric.......We'll see.....The markets' technical condition has looked increasingly dire of late, so it's no surprise when negative news offers any excuse for more aggressive selling. We can argue over how much of a negative increased bank regulation might be, but the technical pattern in place helped investors see it as a big negative. If we weren't already on the verge of a breakdown, I suspect the news may not have had such an impact.

To add to our problems, GOOG is getting hit pretty hard on pretty good results. Its earnings came in ahead of expectations, which isn't good enough for a stock that always carries high expectations.

The major indices have now given back all of their gains this year, and we are showing signs of gaining some momentum to the downside. We have had consistently negative reactions to news, both good and bad, and the dip-buyers haven't shown the sort of interest that has saved us so many times last year.

I don't know how many times this market pulled back from the brink of disaster last year. Every time we were close to a breakdown, we came roaring back, which made anyone who took some defensive actions feel a little dumb. However, if you want to survive and prosper in this game, it is extremely important that you take steps to protect your capital when the market starts to act poorly. You might find yourself selling at exactly the wrong time, but it is a form of insurance.

We have GE reporting tomorrow morning, but the next big report is AAPL on Monday. That's the one the bulls will be most optimistic about, so it has the potential to generate big moves....

long GOOG and AAPL

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