In a previous entry titled GOOG trouble written the day after Google's somewhat stunning earnings miss on July 20th, I had noted that the ratio GOOG divided by SPY (in other words Google relative to the S&P 500) always seemed to stall at a certain value (incidentally around 3.5).
Well, it appears that resistance was overcome today as you can see in the first chart.
Obviously, this level must hold in the next few days for it to be meaningful but should it hold, I believe GOOG will make new highs between now and the next earnings report. It would also be positive for the market as a whole, Google being a market leader and all. Now, if this scenario plays out as scripted, I would suggest getting rid of all longs or hedging a big portion of them....before earnings. Just in case. Once bitten, twice shy.
On a different note, I've been reading Greenspan's book and I must say I'm pleasantly surprised. I expected bland, close to the vest Fed speak. What I got so far (I'm half-way through) is introspective, penetrating analysis in eminently readable English. A few annoying self-congratulations here and there but hey, he's Alan Greenspan.
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