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Facebook (FB), Apple (AAPL) Lead Tech Decline


Overall, the choppy action over the last couple weeks should be read as a signal to trim long and wait for better set-ups.

US markets fell Monday as focus shifted back to the European debt crisis. The Nasdaq was hit the hardest, falling 0.6%. European officials continue to wrangle over terms of a joint oversight of Europe's banking system, and the next tranche of Greece's bailout will be called into question until it closes a supposed $20 billion budget shortfall.

The Nasdaq's relative weakness can be blamed partly on Apple (NASDAQ:AAPL), which fell 1.3%. There were two catalysts for AAPL's decline: disappointing early iPhone 5 sales numbers and a riot at the company's FoxConn plant in Northern China. Weekend sales of the iPhone 5 came in at 5 million, below some analyst expectations. At more than $700 per share, AAPL had become priced for perfection, and the early numbers didn't meet the mark. The FoxConn turmoil is seen as a more short-term speed bump that should get resolved this week and not have a major effect on production.

Facebook's (NASDAQ:FB) tumultuous public life continues, with the stock dropping 9.1% today following a very bearish Barron's cover story that put a $15 per share valuation on the company. Over the last few weeks it seemed FB had started to turn a corner following a strong public appearance by CEO Mark Zuckerberg and his reassurance that he wouldn't be selling any more shares when the IPO lock up expires. However, FB has found it hard to sustain any sort of bounce since it went public back in May, and it looks that trend will continue.

Google (NASDAQ:GOOG) was a man among boys today, surging 2.1% despite the down market. Google's traditional search-based advertising platform continues to perform better than ad networks on new social media sites, and it appears institutions are piling into this tech "dinosaur". Who thought five years ago we would be referring to Google as "traditional"? Back on December 29, 2011 on CNBC with Brian Sullivan, I called Google my stock of the 2012 and slapped a technical price target on it of $750, and then $825. Today, it reached that first target of $750.

Overall, we have been noting the choppy action over the last couple weeks as a signal to trim long and wait for better set-ups. When action gets choppy at the top end of a move, it's usually foreshadowing that at least a shallow correction is imminent. Continue to take trades and be prudent, not be greedy and buy stocks at the tail end of big moves.

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Scott Redler is long AAPL, GS, XLF, LNKD. Short SPY.
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