The volume of the drop today outpaced the breakout that brought us here, so it will be interesting to see what happens.  If the market follows through with its correction, RIMM may be a nice short play.  If not, it should at least be interesting to day trade on some bounce back days.  Either way, all of these stocks are interesting to watch if you like tech stuff for the long run too.

The market showed some strength again after a midday test of support.  CAT’s earnings tanked, but were better than expectations which was enough for the bulls to jump on.  AAPL released after the close and said they did well last quarter, so it will be interesting to see if the positive retail sentiment can carry through tomorrow.  The $950 line remains the line to watch.

The first stock screen beginning investors implicitly learn is to think about the products and services they really like in their lives and look up whether the companies are public.  Palm happens to be one of those companies for me now after spending some time with a Palm Pre.  If you want a phone that lets you play games and listen to music, the iPhone is probably the only thing you should be looking at.  However, if you’re like me and you want something as a personal organizer, email, messaging, web browser, etc. device, I don’t see how you could live without the multitasking Palm Pre. 

I know I’m abnormal, but I always have at least a few different web pages loading and a couple conversations going on at the same time, which the Pre allows me to do seamlessly.  Surfing the internet on the iPhone feels like going back to pre tabbed browser days.  Is the Pre going to take over the smartphone market?  Probably not — at least not in the immediate future.  As much as the AAPL fanboys will hate me making this comparison, the iPhone is essentially the Windows of cell phones, and the Pre is a little mix of Ubuntu and OS X.  Each have their technical advantages and disadvantages, but if you aren’t leaps and bounds above the competition it’s tough getting people to switch, as Apple has found out in their PC war.  Fortunately for Palm, the turn over on phones is a lot quicker than on computers.

If Apple decides to stay AT&T exclusive, look for this race to get a lot closer much quicker.  Also, pay attention to GOOG’s big surge of Android phones coming later this year, MSFT’s WinMo 7, and RIMM who’s starting to become a bit of a dark horse after dominating the market for so long.  Of these companies, as a trader I would selfishly prefer that PALM or RIMM win the war, since dominating the mobile phone market would make a much smaller impact percentagewise to the bottom lines of any of the other gorillas.  Other companies that are interesting are ARM and Imagination Technologies, since they make the chips that all of the phones are using right now, so any expansion of the market would be good for them.  However, they’re both on the London exchange (ARM has an ADR under ARMH though).  Expect more posts on the subject in the future…

Was this more than just a bounce?  I’ll reserve judgment since we’re still in the same channel.  The most notable thing today for me was that AAPL had their holiday earnings call after the bell, and of course they exceeded expectations again.  That allows them to stay towards the top of my watchlist, but of course I’m not sold on picking up any long term positions still.  Let’s see how everyone else did during the holidays last year.

Retailers were worse than expected, Citigroup (C) is falling apart, and oil continues to die.  That all adds up to another down day with increasing volume now.  The holidays make reading the volume funny, but the rise in volume during the immediate downtrend is unmistakable.  On top of all that, after the market close Apple (AAPL) confirmed the fanboy’s most dreaded fear: Steve Jobs is taking a medical leave of absence. 

Everyone knows how important Jobs is to the company, but I believe they’ve grown bigger than him now.  The roadmap is probably laid out for the next couple years already, and it would take some serious missteps to kill the momentum that they have now.  Hope that people overreact to the news and give the stock a beating, and at the very least it will present a nice swing trade.  No guarantees on how AAPL will deal with this over the extended timeframe (2+ years), but I still see them as an attractive stock if the market recovers before then.

What a historical year 2008 turned out to be.  With nearly a 50% drop from the year’s high to the low, we experienced volatility not seen for over 20 years.  With a new president coming in and a single party controlling the government, there will be a lot of changes in the near future.  Whether it’s for better or worse will be determined though.  Once the volume picks back up after the holidays, look to see if the volatility spikes back up or if the market stays in consolidation mode. 

My top thing to watch for 2009 is probably oil right now.  The bubble will finish deflating, and at some point OPEC will find the correct supply balance for the shrinking markets.  Since oil is less correlated to the general market than other equities, even if the market fails to turn around in 2009 I think it still has some potential to be a good bullish play.  If the market does turn around, then all the other usual suspects are in play – AAPL, AMZN, GS, MOS, and whatever else shows up under my bullish stocks. 

It’s probably time to start revisiting some stocks to update the trigger levels on the likely leaders for when the market reverses back upwards.  AAPL has always been strong and seems to be a fan favorite, so I’ll start there.  On the weekly chart there’s been some support/resistance around 115 that we’ve recently tumbled through.  On the daily chart there’s been a big slide in September, followed by a couple of strong support days in the 120s, and culminating with the dive off the cliff, 18% loss day.  To me, that currently means set an alert when the stock breaks 120, and start really looking hard as it fills the gap up to 130.  Of course the broader market conditions should dictate what you do too.  The next earnings call is at the end of October, so look to adjust these levels after that.  If we’re lucky, there may be an extra 30% off sale in the near future.

The market was surprisingly strong today.  After opening down, it managed to bounce back despite a lack of great news.  AAPL managed to claw it’s way back to end just a couple percent down, showing surprising strength much to my chagrin.  I guess it’s good that it’s not hitting a buy point yet, since the market isn’t really in any condition to establish new longs anyway.  Next up on the earnings parade, AMZN, reporting tomorrow after the market close. 

The trading day was fairly quiet most of the day.  BAC started the banks off well after reporting a better than expected profit of 72 cents, still down 41% from last year though.  AAPL had their call after the market close and they reported a great quarter, but a weak outlook leaving their shares currently trading down 10% in the after hours.  They have a history of under-promising and over-delivering though, so I’m seeing this as a potential good opportunity to get in at a discount if it keeps dropping down to support. 

I separated the volume today to highlight the decline, since it’s been hiding behind the falling price recently.  A move in one direction with declining volume typically means it’s just a correction, and that the prevailing trend will resume in the near future.  We’ll have to see how deep the next drop goes.