Note to self… Is it time to short Google?

(…short it “again”, that is.)

With all numbers and fundamentals aside, I had a major short signal on Google triggered last week and today based on my correlation models.

1) AAPL and YHOO’s sell off today on high volume less than 10% from their 52-lows is NOT good. It didn’t help that Yahoo decides to cut 10% of its workforce today… in which we probably won’t see the ripple effects into other .com companies until after the holiday season. Regardless of what AAPL reports afterhours, I will be looking carefully at the price action for the next two weeks because we’re still very near the 52-low, which means we need some serious follow-through. That should tell you how investors truly feel about the company… not what happens on the first day.

2) And today, GOOG got sent back at the 20-day, signalling a large lack of buying power on the short term and long term time frames.

I hope these triggers are wrong, but I won’t bet against them. GOOG is still the top inovative company out there, but so far, like Apple, a lot of their latest products have not wowed us enough (probably because they set the bar too high). For example, Google Chrome and the Google Phone hype is anticlimactic, and the 3G iPhone didn’t have the celebrity status of the first generation iPhone.

So, as oversold as the NDX may be, I’ll be looking to re-short the tech giants again on every spike or when the relief rally play is done. Deep down inside, I hope I am wrong because I would rather play the NDX on the long side, and we really need the economy to pick up as we close out 2008. Tomorrow, all these stocks should move up, but don’t get bullish on any spike if the volume is not there. If you’re looking to hedge this play, I would look into buying in-the-money calls on the Qs.