Here is a picture of yesterday's Barrons cover and here is a link to their cover story on Google. Above this post you will also see an hourly chart of GOOG.
The Barrons story is entitled "In the Drink" and the cover depicts Google's logo, modified to read "Gurgle", as a ship sinking beneath the waves. As you might imagine the story itself gives many reasons to be bearish on Google. In fact its lead paragraph says "... there could be a lot more tumbling ahead. The share price could well be cut in half over the next year....".
I would have a lot more confidence in Barrons' analysis if they had at any time published bullish stories on Google but I haven't been able to find one. It is important to keep in mind that big media are in the business of telling their readers what they want to hear. The typical Barrons reader is not someone who has been riding Google up from its IPO price of 85. And, having missed this boat, he is hoping to watch it sink beneath the waves. Hence this cover story.
The real import of Barrons' story is that it will provide us with a good test of the market's condition. I happen to think that most of the weak holders of GOOG have been shaken out of the stock by the steep, 25% drop after the latest earnings numbers. That drop carried GOOG down to 350 before it rallied to 406. The Barrons story so far has manage drop drop GOOG about 18 points from Friday's close to 343, only a little under the earnings number low of 350 and very near strong support at 348, the 3 5/8 multiple of the low price of 95.96.
I think we shall see a strong recovery back above the 350 level and that this will be the first stage of a move to 495.
Here is another important observation. GOOG has been the market's leader during the past 18 months. If the bull market is over a story like this one should send the general market lower. But if it fails to do this we will have a strong indication that the bull market is still in good shape and that much higher prices lie ahead. It is this latter outcome that I expect.