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. 
This was a different kind of day….the markets continued in the direction they opened….and in a very strong fashion. Advance/Decline volumes were huge: NYSE A/D volume closed at +34:1. That’s a decisively positive day! It’s not often you see a panic buying spree. Now, do we get some follow-through on Friday?
According to the Stock Trader’s Almanac, Friday before Memorial Day tends to be lackluster with light trading. But, over 60% are bullish! Maybe we do get a follow-through.
My long positions were looking a lot better today than earlier this week. C UWM and ABK are all green. UCO which was way underwater is now getting close to the surface and may get green in a day or two. My DRYS calls still have a way to go, but I have until January for them to recover. 
Going through my scans this evening, there are way more stocks than I can keep track of during the day. So I may fine tune and keep scanning to pick the cream of the crop.
Tomorrow, I’m hoping, I can actually get out of some of my positions. I’d like to lighten up for the weekend. Besides, I need to buy a lot of ribs and beer! We’ll see how that goes. Have a great Friday if you’re trading….and if you’re not, have a wonderful weekend.
Last year in March, the S&P dropped down to 666 and it started a great bull run. Well, today, the Russell 2000 hit 666 as well. How about it….the start of another bull run?
I was stutter clicking today, afraid to go long, but my best wins are when I’m afraid to buy. Today was one of the best days I’ve had trading the ES to the long side. I also added some UCO C GTF….yes, to the long side. Position sizes are not large, but I will add to them if….no, when, they take off. 
Of course today’s heavy selling into the close gives me some trepidation, but I think we’re close to a bounce, if not a more sustained up move. While you’re waiting, here’s some notes to look over:
Commodities — the Crash You Didn’t Hear
Conspiracy of Banks Rigging States Came With Crash
Percent of Stocks Above 50 Day Moving Average Nearing February Lows
Jobless Claims tomorrow morning and optione expiration on Friday. Buckle up, time for a ride!
With oil so much in the news, I would think that it should be hitting bottom soon…say, $70 maybe? I don’t trade the crude oil futures, so like I said a couple days ago, I’ve added USO UCO into the watchlist….I even nibbled a bit on UCO already. It looks like $10 has been a resistance/support area before.
Here’s a note on USO: Is This Oil ETF Ready For a Bounce? USO
After doing my scans this evening I see a lot of “evening star” setups, which generally means those particular stocks are going down. On the other side, I also found a greater number of hammers, looking for a reversal up on those stocks. Of course, as in all candlesticks signals, we need confirmation in the next candle, no matter which direction you think they may go.
Futures this evening are looking tired with ES down 6 points and YM down 60 points, and oil futures just about where they closed Friday. I went into the weekend on the long side, but in very small positions of UCO SSO and C. Remember, for the past year a down Friday is followed by an up Monday.
I got some additional reading material for you today:
Impossible Wall Street Fixes
Fear of a Double Dip Could Cause One
The Huge Difference Between The “Flash Crash” And The Crash Of ’87
5 things we still don’t know about the market plunge
Happy trading and I’ll see you in the market!
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....
