Tech Cant Rally

The inability for Technology/NASDAQ to rally off of Goldmans broad upgrade of the Software/Hardware sector is really telling of where this market is going. Not to say that that we wont see an afternoon rally, but it certainly looks like investors are in no mood for risk assets. No one is buying this upgrade, probably not even Goldmans trading desk.

This coupled with Crudes drop below 60 has many on the street looking for the exits before the weekend.

Back to Goldmans upgrade:

Technology hardware sector should improve into the seasonally strong 2H, Goldman Sachs says, upgrading sector recommendation to attractive. Firm says Street's estimate cuts on tech hardware are largely over, as companies should report stronger earnings in next 12 months due to cost cutting, and as corporations upgrade PCs in 2010. Goldman ups Dell to its "conviction" buy list from neutral, due to its benefit from the upgrade cycle and past stock under performance; downgrades IBM to neutral, saying market will shift to growth from safety plays. Also upgrades Seagate to buy, downgrades Western Digital to neutral, saying STX is a better value to play a recovery in hard-drive demand.

I don't know what to say other then Goldman probably has lots of DELL and SEAGATE stock in their inventory that they need to dump, as well as they are short IBM and WDC.

Their main thesis of corporations upgrading in 2010 is so absurd that it defies logic. Corporations are cutting back employees at alarming rates, why upgrade technology? Where are the killer apps to upgrade to? Vista Sucks! If cost cutting is the main theme, why would corporations upgrade? Dumb upgrade, Goldman definitely has unsold inventory of DELL, MSFT, and STX they want to dump on the CNBC retail investor crowd.

The only reason Tech has rallied this year this much is that tech companies by and large have good balance sheets and are not leveraged.

The idea that investors would shift from growth to safety is also ludicrous. The whole planet needs to de leverage exponentially.

There are rumors hitting the tape about pending layoffs at Cisco Systems, the market is taking its cue from this and ignoring the bogus Goldman upgrade.

Another shameless attempt to keep the market at artificially high prices.