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Bar Lowered for Biggest Tech Names


Former high-flyers scale back expectations.

Nokia (NOK), following Intel's (INTC) lead yesterday (which itself followed Cisco's (CSCO) last report) warns of lower guidance today. And I think we'll see many of the biggest cap tech's lower the bar for the upcoming quarter. They're now in "no harm, no foul" territory, where they can make sure they put forth ultimate "fundamental" lows and give themselves some guidance comps to beat.

The Intel announcement hurt the market yesterday morning, but it was taken better than most of the other dire economic news. And lest we forget, Intel has gone from $30 to $14 over the last year while producing record profits, a P/E that's come down to 11, and a dividend yield of 4.1%. Yes, that's Intel's divided yield (twice a 2-year Treasury), though you rarely hear an analyst talk about something like that while they downgrade the name at lows. Net, Intel was priced for more bad news.

I suspect the same of Nokia. However, I've been severely critical of the ECB - and still am, as they are still 3 curves behind the curve. This could plague Nokia longer than some other tech shops, though they have a strong global distribution network. And given that Nokia's dividend yield is 6.8%, maybe they'll mark a durable low today or very soon.

As I said around the October lows, I would be very willing to call "ultimate lows" here if we had an uptick rule - and these lows may hold, though I hate seeing the market go through a new retest nearly every 3 weeks.

It's noteworthy that the NASDAQ has broken old lows. Earlier this week, I buzzed that Google (GOOG) would trade between $285-295 and that that was a necessary evil. Apple (AAPL) did hit my $85s, as well. So these are 2 more ingredients for making durable lows.

Late Wednesday, I buzzed that I added more Ultra QQQ ProShares (QLD) and, as tempting as it was yesterday to dump them into the ramp, I didn't. My plan was to keep them into the mid- to high $30s, and then write calls against the position. So, unless we get another 100 points on the Naz in a day or 2, I'll stick with the trading plan.
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Position in QLD

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