I have been alerting you for weeks that the recent revival in technology was due more to short covering rather than an evolving bullish trend. The facts just didn't add up. Insiders were selling, and the price of technology products were falling.
This morning Dell (DELL) failed to meet analysts expectations on the revenue side, and the stock is off a little more than 3 points or almost 8%. The facts begin to add up when you go back and look at the insider selling at Dell. Since June 1st, insiders have sold almost 1.25 million shares prior to today's earnings dissappointment. Did they know something ? We'll never know. Its one of those dark clouds on Wall Street that no one wants to investigate.
There will be a time to buy tech, but I don't think its now. If the economy pulls back in 2006 as anticipated, the early cyclicals and financials will be the sectors that come back into favor. The perfect senario would be a reversal of the curent interest rate trend, insider buying, and 20%+ lower stock prices.
Today's insider trading data continues to show a major focus on selling (77 buyers, 220 sellers). Sellers on the tech side continue to be Corning (GLW), Motorola (MOT), Texas Instruments (TXN), Microsoft (MSFT), Google (GOOG), KLA Tencor (KLAC), and Seagate (STX).
