Google (Alphabet, symbol GOOG) and Microsoft (symbol MSFT) both fell sharply this past Friday on earnings disappointments. Microsoft ended the week 8.8% below its best weekly intra-day high set on Tuesday, April 19th, while Google ended the week down 6.6% from its intra-week high (also set on Tuesday).
Incredibly, despite extraordinary losses in these two market bellwethers, the Nasdaq Composite lost only 0.80% on Friday, while the Dow Jones Industrial Average, Russell 2000, and the S&P 500 Index actually posted modest gains on the day!
Should stock market investors be concerned about the breakdown in Google and Microsoft? Or is this just another example of a market that is immune to bad news and will continue to "climb a wall of [earnings] worries" to new all time highs?
No one knows the answer, of course, but I remained convinced that the U.S. stock market is still extremely vulnerable to a major correction right now and that investors need to be short or out! Not even the ultra hot precious metals mining shares hold appeal to me right now. Daily chart "red dot" sell signals were triggered by my computer trading system in most of the miners this past week, and I expect a significant retracement of recent gains in this volatile group over the next several weeks.
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| Google Weekly Chart with Computer-generated Buy & Sell Signals |
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| Microsoft Weekly Chart with Computer-generated Buy & Sell Signals |
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| Philadelphia Gold/Silver Miners Index (XAU) Daily Chart with Computer-generated Buy & Sell Signals |
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