Friday, July 31, 2009

The Tech-Heavy Nasdaq Is Up 13.2% Since July 9th?

I preface this commentary by saying that the Nasdaq has a higher beta than the SPX or the Dow. That is, the Nasdaq will tend to make bigger percentage moves up and down for every 1% move in the SPX or the Dow. Having said that, it seems that lately the action in the whole stock market, up and down, is being led by the action in the Nasdaq. If you look at the employment data in the article I link, it would suggest that it's time to take any gains clawed back in your portfolio since the March '09 bottom and thank the Fed for that gift. The fundamantals will soon take that gift away and turn it into bigger losses:

As per the chart in the linked post at, unemployment in the Silicon Valley has spiked up to 12%, which is above the statewide jobless number in California and quite a bit above the jobless number for the country as a whole (I'm using the Government-produced/manipulated number for purposes of comparison - I'm not endorsing the Govt number as being even remotely close to accurate - real unemployment is much higher).

It would seem to me that the big rally in the Nasdaq is not supported in any way by fundamental factors, other than maybe all of the money being injected in the system by the Fed. Here's the link:

It would also seem to me that anyone with money invested in technology or Nasdaq stocks should think about selling.

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