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Three months ago, the market set a new all-time record for overbought condition, up 13 days in a row. This week we set a new record for oversold condition in the Nasdaq. Thursday, Doug Kass called the low the bottom, predicting it's back up from here. He called the bottom correctly a year ago March and has some credibility. On the other hand, you can see below we're very close to an "iron cross," where the 50 day moving average crosses the 200 day. This is considered extremely bearish. There was major support in the market at S&P 1040, but you can see we crashed right through that this week. Corporate profits continue to be good, unemployment continues to be dreadful, Germany's government is getting all punitive against Club Med and it looks like they're going to force a couple huge European banks into bankruptcy. What's next? A strong case can be made that we're going to drop another 10% in the next few weeks. A moderate case can be made that this is a correction and we just hit the bottom. Personally, I've not a clue.

S&P 500 January 6 2010 to July 2 2010

Sorry, not much news this week. Obama's popularity continues to ooze away. Oil continues to bleed into the Gulf, no one is sure how much, how fast, or if it's going to get better or worse. BP canceled their dividend, which is often a precursor to bankruptcy. Now that the temporary Census workers are being let go, unemployment is looking terrible again, but that's not news: we've all known for some time that it will take several years to fix this problem. Foreclosures continue to rise, no news there. The market dropped a whole bunch, but on light volume, so it's difficult to say what that means. Decent chance next week it will go up a bit, also likely on low volume, so it's difficult to say what that will mean.

50 years ago, the hot item was the main frame computer - a large multi-million dollar installation with far less compute power and storage than your cell phone. The market was made by IBM and the "seven dwarfs," - RCA, GE, Burroughs, UniVAC, NCR, Control Data and Honeywell. By 1970 technology had changed, computers were made of chips instead of individual transistors. RCA and GE dropped out, leaving IBM and the BUNCH. In the 70s mainframes had to timeshare, communicate with display monitors and keyboards, and accept peripherals from many different companies. The BUNCH lost it, they couldn't keep up. The new companies were IBM, Digital Equipment and Data General. Technology changed again in the 80s when Apple and Commodore started building "personal computers." IBM survived this technology change again by releasing the IBM PC and signing a pact with Microsoft, but Digital Equipment and Data General couldn't make the leap and slowly bled to death. In the 80s the big computer companies were IBM, Apple, Compac, Packard- Bell NEC, Sony. Windows and the Internet made a new marketplace in the 90s. IBM, HP, Compaq, Dell and Microsoft prospered, Packard- Bell and Sony fell off the map. Today, we're making a technology leap again. The latest thing is mobile devices, free apps, music and video - everything you could want is available on the Internet somewhere. The hot companies are IBM, who continues to integrate networks for huge companies, Apple with the iPhone and iPad, Google with their Android operating system. Hardware is made cheaply by a bunch of little Chinese companies that you never heard of like HTC and Lenova.

The story of computing has been one of successive technologies leading to the death of most of the earlier players and the birth and growth of new companies who are leaner and have a clearer vision of the future. My point? Microsoft is dead. Like a good zombie company they're still staggering along, using their $50 billion of cash like Viagra to support their stock price, but where's the Microsoft phone? Tablet? App store? Music store? Their big idea is a free version of Office that blasts you with ads and is buried somewhere or other on the web. Please. The history of Microsoft stock prices are clear, they really want their stock above $20 per share. When Microsoft stock drops below $15, then we'll see a gradual decline turn into rats jumping off a sinking ship. My personal take: good riddance to the bug-infested arrogant crash-dummy monopolists. With the embarrassing name. (Was that over the top? I can never tell. . .)

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