Thursday, April 14, 2011

Google On Tap

The market is lower in early trading, led down by the financials. Weekly jobless claims were a bit weak this morning, which didn't help sentiment. The weakness started overseas, with most Asian markets slightly lower. But the selling picked up steam in Europe, where their markets experienced larger declines. The S&P 500 came down near the 1300 level this morning, but has since bounced a bit since then. Trucking company JB Hunt (JBHT) reported solid earnings and its stock has spiked to a new high. It always nice to see one of the transportation stocks breaking out, as that is a positive tell on the economy. Tonight we will hear from Google (GOOG). I think they will report good numbers, as search activity has been strong and all of the news events like Libya, Japan, etc. only lead to higher Internet traffic and more searches. The wildcard is that GOOG has been on another hiring binge recently, and also implemeted a pay raise this quarter. So higher operating expenses could take some of the upside off. But if I were new CEO Larry Page, I would want to put up a very good number for my first quarter as CEO. Commodities are higher again, with oil rising to $107.85, and gold prices back near $1470. The 10-year yield has eased back to 3.47%; and the VIX is up a mere 2% to 17.25. Trading comment: The major indexes have been struggling to hold their 50-day averages, which puts them in a weak position. I'm anticipating just a mild pullback this time around, given that we just finished a full 7% correction in the SPX. So I want to use upcoming weakness to add to positions, focusing on those stocks showing strong relative strength and those who reported solid earnings last quarter (if they haven't reported this quarter yet). long GOOG


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