Jan 26, 2005


I responded to MaoXian's Taser post, by saying Google (GOOG) looked like a similar pattern and today he draws it up. I would add that the easy trade was the pennant break lower after it failed the 200 level. At this point it is a bit dangerous to assume it will make it back into the gap.

The other day when GOOG was making its push to get above 200 I opined to a colleague that this rally's fate was a bit tied to the fate of GOOG. My reasoning is simply that its poorly received IPO coincided almost perfectly with the August bottom. The fact that its IPO proved to be such an opportunity emboldened the public and made many other IPOs possible. It is that public participation and buzz that really got this market swinging in Q4. This is an oversimplification and one stock rarely defines the market but the market always needs a story. Making GOOG the poster child of the second internet bubble will have a lot of resonance if the stock begins to let investors down.

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