Two Big Boys of the NASDAQ

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Take a look at the chart of the QQQ below. The tone and temperment of the market changed completely on May 22nd. It divides the before-time from the after-time, and the change in character is so extreme that it’s hard to believe it’s the same market.


So on the left we have (personified by cute Britney, from my home state of Louisiana) a steady, reliable market which, much to my annoyance, pretty much went up every single day (we shan’t speculate further on Britney in this respect). On the right we have a much more volatile situation (Britney, ibid.) and, frankly, a market I much prefer.

I was so struck by this, I seriously wondered to myself – what on earth happened on May 22?!?! I went back into the Slope archives, and I pulled up my afternoon post that day (here is the link). In the post I bemoaned the fact that nothing at all was affecting the market, and that the only thing that mattered was what came out of Bernanke’s mouth.

Well, ya know, that’s kind of proved itself out, because Ben himself really kicked things off last Wednesday, and although just about everyone I speak with believes another new high is just around the corner, I will foolishly state that May 22 is probably The Top.

Now I am not going balls-out on this notion (yet), but I wanted to just mention in passing a couple of pretty interesting stock charts before I saunter off to do other things with the balance of my day.

First up is Apple, which I’ve been pretty much ignoring ever since persistently tooting my I-told-you-it-was-going-to-$390 horn. Some folks in the comments section (and one gent in particular) were passionately devoted to the idea that Apple was sporting an inverted head and shoulders pattern. I disagreed. I’ll let the chart’s results speak for itself. Suffice it to say I think Apple’s glory days died with my hero Mr. Jobs, and Tim Cook is just another rich, boring executive at another rich, boring company.


As for Google, this chart usually puts my feet to sleep, but because of its high nominal value, I decided to buy one – count ’em! – one put today. I confess my marvelous XLU trade earlier this week has made me more fond of options trading, and provided GOOG doesn’t violate the price bar I’ve tinted below, I’m aiming to use the large potential price movement of this to goose my massive one-lot position.


Tomorrow is the last day the quarter, and the last-day-ness is bound to make things a little more bizarre than usual. I am planning to exit the quarter aggressively short. I’m only 63% committed right now, but that figure will almost certainly be a lot higher by the time we bid Q2 adieu.