Earnings Reports Continue To Recieve Positive Reaction

The market is higher again in early trading, as earnings reports continue to roll in and garner positive reactions for the most part. Bank of America (BAC) actually reported an earnings miss but the stock is trading 5% higher as investors shrug it off and look forward.

Other stocks reacting positively to earnings reports include: FFIV, EBAY, and MS to name a few. Tonight we hear from big daddy Google (GOOG) and IBM, as well as ISRG and MSFT.

In economic news, the weekly jobless claims fell by 50,000 to 352k. This is the lowest initial claims level since 2008. Hopefully this will translate into improving monthly jobs figures and a decreasing unemployment rate. The market got a boost from this data.

Asian markets were higher overnight, and Europe is up slightly this morning. The euro is also higher again, which is helping most commodities. Gold prices are slightly lower near $1656, but silver and copper prices are higher. Oil prices are also higher again to $101.35.

The 10-year yield is finally getting a boost on some of this economic data. This morning it is up 8 bps to 1.97%, but still below that stubborn 2.0% level. I think at some point the 10-yr yield could have a big spike higher. As for the VIX, it is down -4% this morning right at the 20.0 level. A close below this level would be another sign of confidence for the bulls.

Trading comment: It's hard to chase stocks ahead of their earnings reports, which is probably one of the reasons that we are seeing nice pops in those companies that reports solid earnings. The market remains overbought, but investors are in dip buying mode and we haven't seen back-to-back down days in the market since mid-December. So far this year, the market is carving out a similar pattern to 2011. Last year the market rallied all they way to mid-February before its first correction. Growth stocks are also beginning to act better as the number of new highs on the Nasdaq is slowly rising.

KAM Advisors has long positions in: BAC, GOOG, IBM