Published on
July 20, 2010,
10:36 pm in
Opinions, Tools and Trading.
Tags: AAPL, BAC, C, dollar, GE, GS, oil, Tools.
So wasn’t there some news this morning about bad earnings from GS? And weren’t C BAC GE still bad? Isn’t everyone worried about the bank stress test in Europe? So why are all the traders happy today?
Funny that the US dollar did not matter, or at least there is not that strong correlation between the US$ and the markets. Oil still seems to be correlated, as oil went up so did the indexes.
Lots and lots of earnings on Wednesday…and even more on Thursday! I’m interested in MS WFC KO QCOM and NFLX. That should give me an idea of how the world is doing. 
And if the markets can’t rally on this evening’s AAPL report, then we’re in real trouble!
I apologize for some short blog entries, but I’m having technical difficulties with my hardware this week. I have tracked the problem(s) down, but new parts will take 7-10 days. In the mean time I’ve fired up a backup PC and getting it ready for trading tomorrow.
See you on the playing field.
C joined BAC and JPM with higher than expected earnings and improved credit trends. But they and all financials puked on Friday. You have to wonder… If you’re making more money on less revenue, isn’t that a good thing? Would you rather see increased revenues with lower earnings?
This earnings season expectations are that all earnings will be good, and so far so good. It’s all about what you say in your conference call. BAC laid out a scenario that doesn’t sit well for any financial institution. They are saying that FinReg will curb debit-card fees and that will reduce revenues and increase costs. In BAC’s case, they say they may have to take a charge of up to $10 Billion dollars. That’s gonna hurt not only BAC, but all banks and financials, like MA and V. Boy did that show on Friday!
So now July OpEx Friday is down 7 of last 10. That sucks…and I’m reading in the Stock Trader’s Almanac, that in the week after July OpEx, the Dow has been down 7 of the last 11 years. That’s ominous.
This week will be one of the biggies with hundreds of earnings reports, including GS and AAPL, 11 of the Dow Industrials, and about every airline! Ben Bernanke speaks on the Hill, but otherwise a fairly data-quiet week.
And one more for the intereting reading pile: Short side of commodity market becomes crowded.
See you in the market 
First it was all the pre-market news like Initial Claims, PPI, Empire Index and Philly Fed numbers. Although the numbers weren’t all that bad, actually the IC numbers were pretty good, traders didn’t like them and we went down…and pretty dramatically after the Philly Fed announcement. Oh yeah, and AAPL scheduled a meeting for Friday morning. We meandered down under for the rest of the day.
But (there’s always a but) first rumors then news came out after 3PM that had the markets giddy with happiness. Maybe BP has finally capped the well! BP took off. Then GS might be announcing a settlement with the SEC. GS took off. Then, kaboom, the markets took off, some ending green…others red. Pretty much breakeven for the day, again. Although that was a nice recovery for the indexes.
Then afterhours, GOOG comes out with a crappy earnings report. GOOG quickly dove more than $20 dollars. But (what did I tell you?) it had no affect on the QQQQs or Nasdaq futures or S&P futures. Maybe GOOG is no longer an 800-lb. gorilla? Even AAPL went green afterhours.
Oh yeah, and Congress passed FinReg….ho hum.
Tomorrow brings some very anticipated earnings: GE BAC and C and they might just set the tone for Friday’s trading, well at least until 9:55AM when Michigan Sentiment numbers come out.
You know I’ve been bullish on oil for a couple weeks now, and news like this can really perk it up in short order: An Attack on Iran: Back on the Table. Now, just clean up the mess and maybe we can get back to normal. 
AA will kickoff earnings season on Monday after the close, and then we got some biggies the rest of the week: INTC GOOG JPM GE BAC C. Earnings for the 2nd quarter should be good, but it will be the guidance for the 3rd quarter and 2nd half that will control the market direction.
Futures this evening have been quiet with no volume….Asia still waking up….have to wait for Europe to kick it in the ass.
Only 3.6 billion shares changed hands on the NYSE tape on Friday….not much. This is definitely a contributing factor: Small Investors Flee Stocks, Changing Market Dynamics.
Guess I should rest up for the morning. 
We’ve been looking for an excuse to correct this market and today we found one. If the market indicators weren’t on sell signals already, maybe the market wouldn’t have reacted to GS so badly. It’s not just banks that went down today. Either way, I suspect no more campaign contributions for this administration from GS. I’m also gonna venture that GS bought its own April puts ahead of the news and will report a stellar quarter next week. GS volume was 7 times above its average trading.
Other good news today: Unemployment rises in 24 states in March according to the Labor Dept. All the big earnings report companies sucked, but not as bad as GS’s surprise: GOOG BAC GE ISRG were all down big.
For the week the Dow ends up .19%, the S&P down .18%, NYSE down .57%, the Russell up 1.7% and Nasdaq Composite up 1.1%. So the high beta stocks are still doing okay, but the blue chips suffered. I expect next week to be down for the small caps.
Should Small Investors Jump Into Stocks?
And oh yes, the SPY puts, VIX calls and TZA did their jobs today!
This bullishness (or is that bullshitness) is making me sick. C’mon people, we are not in that great of shape. Did you see initial jobless claims ticked up along with continuing claims? Of course now that unemployment has been extended another year, there should be a lot more liquidity now available for the market! 
Both ISRG and GOOG had earnings reports this afternoon and are getting snipped afterhours. GOOG was down over $30 from the day’s highs while ISRG was down $13. I’m expecting QQQQ puts and SPY puts should work out well tomorrow….along with the GOOG puts of course. Futures are already moving to the downside….we’ll just have to see how far. BAC and GE report in the morning, so maybe that will be the frosting on this cake. Housing Starts and Consumer Sentiment get reported tomorrow as well.
Remember, it’s options expiration Friday….do you know your options? 
Sometimes, entranced by the screens, watching equities, options and futures change colors, charts moving in a wave, and indicators pointing in every direction, I just have to scream....
