Next Week, It May Be Tech's Turn

 | Jul 25, 2014 | 7:14 PM EDT
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They turned on retail. Then they turned on aerospace. Then they turned on industrials and housing. Will tech be next?

You have to worry about the way this week went out. We have ignored bad geopolitical news for several weeks because the earnings were pretty darned good, but it seems like the ignoring days are over.

Plus, toward the end of the week, I thought there was as much bad as good on the earnings front. Plus, for the first time in ages, it felt good to have some cash.

I think that next week's headwinds are going to be about a ton of new supply and a sense, post-Visa (V), that we are going to start getting geopolitical guide-downs from companies that do business in Europe. That has been noticeably absent this earnings period until today.

We have raised a lot of cash for Action Alerts PLUS, as we seem to be in a period where the risk/reward has changed for a lot of our stocks. It was gratifying to see Lear (LEA) and Stanley Black & Decker (SWK) run. But we are back in the world that if you don't blow away and guide up, you get a Starbucks (SBUX). Given the runs we have had, the bar has been lifted a little too high. Or to put it another way, if Starbucks were at $75 going into the print, it would be at $78 now. It just got there going down, not up.

I felt that by the end of the week there were too many moving parts: bonds not making sense, industrials being clobbered on the same old news and aerospace being shot everywhere.

But tech hung in, I think because of good numbers from Facebook (FB) the day before.

I know not a lot of tech reports next week, but have you noticed the stalling out in Microsoft (MSFT), Intel (INTC), Hewlett-Packard (HPQ) and Oracle (ORCL)?

I like all of those, but I recognize that they have gone about as far as they seem to be able to go on the same old news that enterprise spending has been going up.

They act like the industrials did the week before last: plateauing.

No, I am not a bear. But I have eyes, and anyone who was bullish could not have liked what you saw near the end of the week, particularly when the Chinese purchasing managers' index reported out strong and all of the levered industrials underperformed.

Supply and Russia.

Age-old enemies of the bull.

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