Tech's Quiet Resurgence

Is the old Nasdaq leadership back? This rally started with the banks, the oils and the techs. We haven't heard much from the latter lately. But I see Apple (AAPL - commentary - Trade Now) starting to make a move that's most impressive. It is a just a few points from its 52-week-high, and it is back in leadership mode. Same with Google (GOOG - commentary - Trade Now), which apparently had a very strong August and is going to be the big beneficiary of the cyclical turn in advertising.

Microsoft continues to sneak up quietly, although it remains a mystery why people think it is doing so well besides comments from Dell (DELL - commentary - Trade Now) and Intel (INTC - commentary - Trade Now) that things have firmed.

Tech reminds me of China. You always have a decent market if tech makes a move, because it is a sign of robust health. The idea that tech could be making more than a restocking comeback still hasn't dawned on people, but it better, especially after what we saw from Ciena (CIEN - commentary - Trade Now) and then Novellus (NVLS - commentary - Trade Now) this week.

Plus, this is the seasonally strong part of tech, and despite the as-yet-unconfirmed slowdown in the foundry work for some communications chips, this group could take off again after a regroup.

The broad-based nature of this rally feels like more than just short-covering. It feels like "big bad event" buying, as in the big bad event has happened -- employment -- and it wasn't so bad, so lets do some buying.

I am also keying on the over-owned Bank of America (BAC - commentary - Trade Now) -- at least according to the Goldman Sachs report about hedge funds, which you can ignore at your own peril, as you only have to ask holders of National Oilwell Varco (NOV - commentary - Trade Now) and Freeport McMoRan (FCX - commentary - Trade Now) what happens when that cohort runs out of money -- and on Wells Fargo (WFC - commentary - Trade Now), where the put-buying has been so ferocious as to be a coiled spring if we don't get some bad news, soon.

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