Friday, January 14, 2011

Market Bounces On Solid Start To Earnings Season

The market was weak before the open, but so far it has found solid footing and is now trading higher in the first hour of trading.

Intel (INTC) and JPMorgan (JPM) both reported solid earnings. JPM's report has improved sentiment throughout the banking sector, while INTC's comments about raising capex has lit a huge fire under the equipment players (see NANO, CYMI, NVLS, VSEA, etc). On the disappointing side of the ledger is Coinstar (CSTR), which lowered guidance and its stock is plunging -25%.

Asian markets were mixed overnight, and Europe is lower this morning after the People's Bank of China raised the reserve requirement over there another 50 basis points. This will increase than agnst over China stepping on the brakes to slowdown their economy and thwart inflation. It will also weigh on commodities in the near-term. To wit, oil prices are lower right now near $90.71 while gold prices are down further to $1366.

The 10-year yield is a bit lower today to 3.27%; and the volatility index (VIX) is down another -2.6% to 15.95. I have been looking for a bounce in the VIX, but they have been few and far between.

Trading comment: This market sure doesn't want to pull back. I think there were too many folks looking for a correction early this year, and as we know the market rarely accomodates what the herd is expecting. That said, there is always plenty of volatility surrounding earnings reports, so I expect upcoming opportunities to take advantage of. Earnings season really heats up next week with AAPL, GOOG, etc. So rest up.

Also, I had the pleasure of filling in for Doug Kass's daily column on yesterday. Check back over the weekend when I will repost all of my comments that ran throughout the day.

long AAPL, GOOG, JPM, VIX calls


At 1:14 PM, Blogger thaydon said...

Thanks for writing your column


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