I am looking at these poor technology stocks and their charts look like the financials did about a month ago. Maybe they have further to go down but some of the valuations are getting to a point of ridiculousness, and they are due for at least some bounce sooner or later.
I still think we are in a greater bear market, but just like the financials, homebuilders, and retailers can rebound off very oversold levels these stocks just look pathetic, so I think the "easy money" has been made for this round.
I have 400 shares of Ultrashort Technology (REW), and am going to sell 300 today in the mid $74s range, and cut my exposure back by 75%. This reduces my stake down to 0.7% of the fund, from nearly 3%. I bought this position just a few weeks ago [Starting New Position Ultrashort Technology (REW)] to offset my long technology stake, and it's done a good job, making a few thousand for the fund in a few weeks. At these levels stocks like Microsoft (MSFT), Google (GOOG), Apple (AAPL) are turning into "value" stocks. Since the charts are so putrid I am not going to buy these just for a quick lift but I don't want to press the hand too far, so I am going to lift the Ultrashort for now, let them rebound and then on a bounce go to a larger exposure. Again, the fact these stocks get squeezed so badly while the stocks at the heart of the mess go up (financials, housing, retail) is a little silly but I do understand the "playbook", and when 10,000 hedge fund computers say "this is how it happens" you have to respect it. But when I look at the charts many of these stocks fell right off a cliff, and this is eerily reminiscent of how financials, retailers, restaurant stocks looked like a month ago before they rebounded. So I am going to reduce my bets against and revisit at a later date.
If this was more of a hedge fund environment, in fact I'd probably buy a bunch of technology stocks to try to flip out after they bounce 5-10%, but since that is not the mandate for a mutual fund I am simply going to move to the sideline and into cash.
Long Google, Apple, Ultrashort Technology in fund; no personal positions
