So going over our short signal on 7/7/2011 we can see that the IWM is down approximately 7% while the Nasdaq 100 is down only 1.5% or so… So does this mean that the Nasdaq 100 is safer than the IWM? In my opinion no it does not — the tech bubble is back and LNKD, OPEN, AMZN, NFLX, etc… show us that tech stocks are very vulnerable to a bear market for equities. With that said, we are not saying switch from IWM shorts to QQQ shorts but we are worried for the high valuation “growth” bubble stocks that are “leading” stocks at present. If we were actively shorting the leaders, we would note the action in former leaders as a proxy for how far the current leaders could fall. Look at AKAM which is now down 50% or JASO which is down 70% from the highs for a proxy of how far AMZN, CRM, LNKD, KKD, etc.. can fall from here. If you own these stocks, you should sell them regardless of the overall direction of the stock market or the debt ceiling farce.
The bubble is acting piggishly, and as my father put it, “when pigs die, their squeels burn circles” — that’s all that’s going on in QQQ… The banskters want their IPO money from Facebook and Groupon… They need to keep LNKD up in order to do just that, but the debt ceiling epic fail will destroy the high PE tech stocks.
