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MV Weather Report: Tech Stocks Make It Rain

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Rain or shine, we review the day's biggest stock stories.

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At midday, the S&P 500 looked poised to test the November lows; it was ugly. Citigroup (C) traded under $2, Bank of America (BAC) traded under $3 and Wells Fargo (WFC)--once thought of as a best of breed bank--traded under $10.

The banks where selling off hard on news of nationalization. The end of private banking seemed near.

Shortly after Senator Chris Dodd said that some banks may need to be nationalized for a "short period of time," President Obama & Co. pulled the trigger. You know the one that gives the market a strange bid? The White House said it would prefer if banks remain out of the government's hands.

Ken Lewis, CEO of B of A, then told the Dow Jones, "We see no reason why a company that's profitable with strong levels of capital and liquidity and that continues to lend actively should be considered for nationalization."

The banks and the market lifted well off the lows, and the bottom callers where out.

Here's what Jeff Cooper wrote in his Daily Market Report (a subscription product):

"I think it's bullish that the DJIA made a new low, and the S&P and the NAZ diverged failing to make new swing lows.

"I would nibble long on any pullbacks today and Monday as I believe the DJIA may be tracing out a similar pattern to the S&P at the 2002 lows. That is NOT a call for the bottom of the bear market. Anyone who tells you they no when that is, is delusional and a sensationalist.

"However, if I'm correct, a sharp rally could occur. The risk to reward warrants being long as the pessimism is so thick you can cut it with a knife. The technicals are poised to ignite from this pattern if a plan that is long on substance is detailed next week."

Cooper may be right; the market could be setting up for a bullish move. However, the day after options expiration the market typically suffers a hangover. Traders could add to long positions if that plays out.

If there was a overall leader in the tape today, it was tech. Readers could consider some of Sean Udall's tech plays.

"Currently, I'm favoring adds in Research in Motion (RIMM), Google (GOOG), VMWare (VMW) and Dolby Laboratories (DLB), but Microsoft (MSFT) may sneak into the fold. And if we get an upside Beta burst, I'll add to my Intuitive Surgical (ISRG) which I started in the mid $90s."

Have a great weekend, Minyans! I'm off to enjoy the frigid New York City weather.
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No positions in stocks mentioned.

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