Reversal

  • Today's reversal looks solid as it is happening despite a good amount of call buying.
  • Despite all the better than expected earnings, the market is back to where it was pre-Intel.
  • Does the fact that the market can't rise on good news portend a lower market or is the market just working off its overbought reading?
  • Amazon is a reminder of why I don't short well run companies on the basis of valuation.
  • There are rumors circulating about a Bank of America secondary. Could that be why the stock has been so heavy?
  • Will we see a spate of secondary offerings once earnings season ends?
  • Have a great weekend.

9 comments:

MarketCynic said...

People are getting skittish, I don't know how much lower we'll go but I do think we'll gap down on Monday just based on the price action and sentiment. But I don't see too many people willing to short this thing even after this weakness. Because the shorts have been burned so many times. They are mostly spectators now except for the bears with brass balls.

Anonymous said...

I am getting motion sickness from the last few days. We should be much higher by now with the earnings and economic releases of the last week. I was fully expecting a major ramp and getting stopped out this morning. But now I am adding to shorts.

We are almost 1% lower in the S&P futures than we were pre-JPM earnings. Hard to believe with almost every major company beating estimates since then.

JD

Anonymous said...

No not almost every company beating estimates.

Review the headlines again. It was about a little more than half beating estimates. Take a look at a lot of smaller caps, most have disappointed.

Anonymous said...

I specifically stated "major companies".

Let's look at DOW components in just the past few days...

CAT beat
KO beat
DD beat
PFE beat
UTX beat
TRV beat
T beat
MCD beat
MMM beat
MRK beat
MSFT beat

BA missed

I'm sure I missed some but this is par for the course in the last week, yet the market is lower. That was my only point. Cleary smaller companies have less latitude to massage their numbers.

JD

Pilot said...

Does anone here read Bob Pretcher and Elliottwave.com? Any opinions?

Anonymous said...

Good article on earnings beating HIGHER estimates...

http://bespokeinvest.typepad.com/bespoke/2009/10/estimate-revisions-and-the-earnings-season-racket.html

Chaos! said...

Interesting data on price to sales metrics attached to this article

http://online.barrons.com/wsjgate?subURI=%2Farticle%2FSB125633731314404773-email.html&nonsubURI=%2Farticle_email%2FSB125633731314404773-lMyQjAxMDI5NTI2NDMyMzQ3Wj.html

Good news for you healthcare bet.

Tsachy Mishal said...

I don't understand valuations in healthcare. Given the aging of the baby boomers and the uncertainty about the economic outlook one would think it would trade at a premium.

The Obama healthcare bill will only increase healthcare spending.

Anonymous said...

I never trust anything written by any publication online or offline and learned this the hardway. They are nothing but the stock market's version of TMZ and Perez Hilton and will just be good for a little bump along the way and create hype but that is it.