Friday, April 17, 2009

More Better Than Expected Earnings: GOOG, GE, and C

The market is slightly lower in early trading, after a strong late-day rally again yesterday. Today is options expiration, which likely added to some of the volatility this week. My guess is that many traders were leaning short the market, and those late day rallies were the signs of short-covering ahead of today's expiration to square up positions.

Last night, Google (GOOG) topped earnings expectations by 23 cents, a nice beat. The stock is trading higher this morning, but not as much as it was in after-hours yesterday. The CEO made some cautious comments about advertising spending in this economy. This morning, GE reported better than expected earnings, and Citi reported a smaller loss than expected.

In economic news, the Univ. of Michigan consumer sentiment survey came out this morning, and has bounced to its highest levels since last September, a promising sign. If confidence continues to improve, that would go a long way to improve consumer spending, bank lending, as well as housing and stock prices (asset values).

Asian markets rose overnight; the dollar is mixed this morning; oil is trading slightly higher, while gold is lower again; the 10-year yield is higher at 2.89%; and the VIX is down again near the 35.0 level, extending its recent downtrend (another good sign). If the next leg of this rally can knock the VIX below 30, that would be very bullish.

Trading comment: I took partial profits on our Illumina (ILMN) position today, on the heels of some good news regarding genome sequencing orders. The company reports earnings next week.

I also took partial profits on our small cap etf (UWM) position, just to lock in more profits. I continue to look for good trades to put more cash to work, but the pullbacks lately have been very brief and shallow. For next week, it will be interesting to see if SPX 850 holds.



At 8:58 PM, Blogger OT said...

Do you post only exits of your positions on your blog or entries and exits? Just curious. Posting exits alone are of no benefit to readers. The index levels you post are great.

At 7:54 AM, Blogger J. Kahn said...

I certainly don't just post on positions I am exiting. I realize that adds little value. I try to give readers a sense of what I'm doing, both buying and selling.

That said, I trade actively, and cannot update my blog with every trade. But whenever I have a position in a stock/etf mentioned, long or short, I always disclose it at the bottom of my post.

Some of these recent sales have been positions I have been long for quite some time. You can always search the archives to look for activity in certain names.

thanks for the feedback--

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