The Four Horsemen are Back!

Back in February I warned to stay out of technology stocks for a while. Last week we saw the unwinding of the commodities trade and the rotation move into tech and financials. The four horsemen have traditionally been referred to as Apple (AAPL), Google (GOOG), Research in Motion (RIMM) and Amazon (AMZN). I personally think we can replace Amazon for another strong big-cap tech name. While I'm not wandering into financials at the moment, I still like Goldman Sachs (GS) and have enjoyed the run-up in Visa (V) and MasterCard (MA). The Nasdaq has found nice support above 2400 and the S&P has closed consistently over 1400. At this stage, I'm calling the bottom here but expect to see more volatility in retail, financial and energy sectors. We were thinking last week the Agricultural (Potash POT, Monsanto MON and others) were done but not quite so fast. The world still needs food and as long as we burn corn for ethanol, this sector still looks good. Don't forget to mix in some Natural Gas plays and the oil drillers (CHK, XTO, APA). Good Cisco earnings would signal the official "all-clear" and tech should do fine into the summer months. Watch for resistance at 2550 for the Nasdaq and a bump on the S&P around 1440. Next stop will be 1500 (along with Google over 630 and Apple over 200).

Meanwhile, Microsoft made the right call walking away from Yahoo. The Yahoo shareholders are going to be coming out in full force like the animals who through Horton in a cage in "Horton hears a Who." Maybe Jerry Yang's heard something no one else has but Ballmer glibly said, "Talk to the hand" this weekend. Ballmer's public letter should make it open season for the Yahoo shareholders to either unseat the board or get them to back to the emerald city. Meanwhile, the Yahoo employees must be thinking "Hoo will save us?"