You never want to hear about saturation in technology, particularly from the fast-growing virtualization part of the market. Yet that's what we heard tonight from VMWare (VMW), and given that it is majority owned by EMC (EMC), it is what we will hear from EMC tomorrow.
This one-two punch of cloud and big data storage could clock tech, which hasn't had the stellar quarterly reports that so many other sectors have had, particularly the industrials.
That plus Seagate's (STX) soft guidance after delivering multiple surprises tells you a lot about the Achilles heel of this market: information technology spending.
Personal computers, servers and drives are all coming up short, and I think we are going to see the first real leg down in a group since 2013 started.
Fortunately, the valuations are all pretty low. Unfortunately, there's a ton of money hanging in the group thinking it can't get any worse.
But tech is not Caterpillar (CAT). There are secular issues involving form factors and devices that are not going away.
So far, this rally has been very broad based. If you are looking to take profits in anything, do it with this group. It's just up too much compared with what we've heard to date.
Random musings: Yahoo! (YHOO) won't save tech, in that it is not regarded as tech anymore but instead is perceived as a media turnaround.
