This chart gives some interesting insight into the recent tech actions:
WDC - Western Digital (disk drive maker) GLD - Gold ETF SPY - S&P 500 benchmark STX - Seagate Technology (disk drive maker with a takeover offer) GOOG - Google (that just gave a good earnings report) AAPL - Apple (that is entering new markets quarterly) INTC - Intel (the staid processor maker) CSCO - Cisco (the staid networks maker) MSFT - Microsoft (Mr. Softy, not changing much of anything) QQQQ - Nasdaq 100 Tech Benchmark
Lots of news here. From takeover prospects (STX) to ‘pin action’ in companies in the same line of business (WDC) to new product successes and earnings (GOOG) to disruptive change (AAPLE). Tech is running nicely for many of the players, but clearly a bit of selectivity pays off. MSFT and INTC are not moving nearly as much as the disruptive players (AAPL and GOOG) nor the “Deep Value” guys (STX, WDC).
I will be trading it via the QQQQ (as it’s a bit over 20% AAPL anyway, but gets the diversification of all those takeover targets too…) which is a bit more predicable using the indicators on charts (as individual company news issues and earnings reports are damped out).
In the above chart, you can see that QQQQ has separated from SPY and is headed in it’s own path, after tracking closely for a while. Big Money is voting for Tech (with overseas sales) and against financials (with the Obama Sovereign Risk).
10 Day Hourly Fast Trader Chart
The 10 day hourly chart often works well with tech for swing trades, but in this context of 10% jumps on earnings reports, it will have a hard time getting you in before the fact.
As you can see, though, the ‘weaving sideways’ MACD is generally just saying “Be in” as does the 50/80 RSI roll and the DMI “Blue on top”. You can use it to time a new entry, though.