Tech stocks have been the safe haven of safe havens in this market. It is a consensus view that if you want to be in stocks, you have to be in US stocks, or emerging markets. If you are in US stocks, you have to be in dividend paying names or tech. The long tech trade is a crowded trade. The beta chasers are all in on tech. They are avoiding high beta sectors like financials and the industrial cyclicals.
The NDX has outperformed S&P 500 for most of the year, but since we've bottomed in October, the S&P has been catching up. It looks as if tech stock weakness could be another catalyst to pressure this market lower. Apple looks like it has topped out.
The size of today's gap up surprised me, but its been a gap and crap. There are still a sizeable amount of dip buying funds who are chasing performance to make up for their bad numbers. They are the weak hands that cause big whacks like yesterday. They will be the ones panic selling in a couple of weeks as Europe gets shaky.
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Watch the global CDS market the real value of the OTC contracts is going to start getting questioned i.e. what they really worth and to who?
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