Fear and Loathing in Tech Land

The last 2 days have been quite scary for the bulls.  Anytime you can drop 110+ SPX points in less than 36 hours brings out a lot of fear.  CNBC Fast Money were about as bearish as I've seen them, even more so than in late October when the market was plunging. One technical analyst who came on the show, who is almost always bullish, was bearish about everything. 

With Nasdaq getting trashed the last 2 days, it seems like the fund managers have thrown in the towel, as the AAPL bad news headlines was just too much for them to deal with, and they sold with reckless abandon yesterday.  Interestingly, the Nasdaq outperformed the S&P intraday, and many of the high flyer tech stocks like AMZN, FB, GOOG, finished well off the lows, even though the SPX finished weak. 

It felt like tech capitulation yesterday, and if the SPX can hold the lows from October this week, and start rallying, you will get double bottom and successful retest calls from your paper napkin chartists.  That will be the time to sell.  Right now, as painful as it is to stay long, you have to ride out the storm and wait for some optimism to come back before selling. 

But it doesn't take away from the longer term picture.  It is a horror show out there, and it will only get worse after we get the sentiment to at least neutral.  I think it is too much to ask for the market to rise enough for investors to get as bullish as they did earlier this year.  Not a lot of strong resistance until you get to the SPX 2720-2730 area.  Today and Friday are usually bullish days historically, as the holiday cheer makes traders more bullish.  With the strong selloff the past 2 days, it looks like we'll rebound at least for the next 2 trading days.  After that, it becomes harder, as the Monday after Thanksgiving is usually bearish.  But these are just seasonal guidelines, not something to have total belief in.