Feburary 2011

  • The market rally which started in November is starting to show signs of weakness. Can it continue to go higher?
  • Google already owns worldwide market of smart phones and aims to do the same for Tablets

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The market has been since November of last year but looked a bit wobbly toward the end of January (see annotated chart of “NASAQ Composite Index”). This rally is the result of QE2, the second round of Quantitive Easing, or the Federal Reserve’s shot of monetary “Red Bull” to stimulate the economy. But for how long? The first signs of a market change may have occurred on 1/19 and 1/28 on high volume price drops. Many leading stocks have also fallen victim with ugly institutional selling as can be seen in the charts of GOOG (Google Corp), FFIV (F5 Networks Inc) , APKT (Acne Packet Inc), ARUN (Aruba Networks Inc). It’s also very possible that this market will recover and continue to trend higher- with its highly volitatle nature. Either way, play cautiously by setting stop losses at no more that 8%.

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This year’s Consumer Electronics Show was rather ho hum. Bigger and brighter 3d TV’s, more internet connected DVD players, and tons of gadgets refreshed with megapixels and added refinements; standard stuff. Google introduced the “Honeycomb” operating system for tablets and its partners introduced dozens of new Android tablets with bigger screens and improved graphics processing. The combination of these will create a silky smooth interface iPad lovers now enjoy and a much improved user experience; at a lower cost point. Google has already taken a dent out of iPad and Windows netbooks sales, and may take over worldwide sales this year as it has in the smart market (See chart “Worldwide smart phone market”).

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