Wednesday, April 13, 2011

Oil Bends, But Does Not Break

The market is bouncing a little this morning, after a solid earnings report from JPMorgan (JPM), and an okay retail sales report. Oil prices had a big drop yesterday, but today they're back hovering near $107.20. I think if we could see oil continue to trend lower, even if it stays near $100, the market would rally as at least the persistent trend of ever higher prices would be snapped. Gold prices are also higher, back to $1460. Financials as a group are lower so far, but JPM is higher after reporting a solid earnings report. The company also reaffirmed its plan to raise the dividend and authorize a $15 billion share repurchase program. In other earnings news, Riverbed Tech (RVBD) raised guidance last night in a surprise move. Many investors were worried about weakness in the networking group, but RVBD said that its WAN business was very strong. Also bouncing on the news is Aruba Networks (ARUN), which is up 10% so far. Retail sales for March came in at +0.4%, in-line, but sales for February were revised higher as well (+1.1%). Asian markets were higher across the board overnight, and Europe was higher this morning. The 10-year yield is up a bit to 3.51%; and the VIX is down -3.5% currently to 16.48. Trading comment: JPM and RVBD were both good news, and should improve sentiment relative to yesterday. Energy stocks are also bouncing today. I think Google (GOOG) will have a big effect on trading, and they report tomorrow. I'll be covering the call for, and will post a copy of my comments on Friday. Volume has been light lately, and feels that way today also. Let's see if this early strength sticks, as its still early in the session. long ARUN, GOOG, JPM


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