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MARKET WRAP UP 10/07/10
In front of the big earnings party that kicked off this evening with $AA reporting, market players held their collective breath today. After retesting and holding the key 1150 zone, the S&P 500 rallied back to finish the trading session down 0.16% to 1158. We saw weakness in the energy and materials, while many tech names recovered from yesterday’s drubbing. Above all else, today was the chop before the storm, if you will.
Whether we see a storm that drenches the bulls or bears remains to be seen. On the one hand, 1150 has held as support on the S&P since the big rally on Tuesday. However, the 1160 area is proving to be tough resistance in the short term. Moreover, while some sectors are quite extended, others clearly are not. Thus, the market remains a mixed bag, with the bulls having the benefit of a series of higher highs and higher lows since late August.
At the time of this writing, I see that Alcoa is up nicely in after-hours trading on the back of an earnings beat. I must say that I am reticent to automatically claim that the market will rocket higher tomorrow just because of $AA. Keep in mind that we also have a much-anticipated jobs report tomorrow morning, which will feature the usually post-report spinning. The zero hedge permabear crowd will thumb through every detail of the report to succinctly illustrate why the world will end tomorrow, while permabulls like Larry Kudlow and Ned Riley will claim that America is back to the sustained organic growth that it saw in the 1950’s.
Instead of playing the macro data game, I urge you to focus on a few other aspects of your trading and the market. First, verify when each of your holdings reports earnings, so as to limit any unpleasant surprises. Next, bear in mind that the market is simply going to do what it wants to do. Indeed, if we are in a bonafide uptrend, then macro news and earnings reports will actually serve as excuses for the market to go higher. Throughout 2009 and parts of 2010, we have seen stocks rise on bad news. To be fair, we have also seen sell-offs on good news. Regardless of how convincing a given macro thesis may be, however, the price action in the stock market pays a far better reward than winning a debate at an effete dinner party, and therefore it commands your respect.
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“I must say that I am reticent to automatically claim that the market will rocket higher tomorrow just because of $AA”
DEFINITELY concur. I want to think it will, but remember IBM? Down like 8 bucks, then the market was up 2% the next day? And what was another earnings recently, maybe RIMM, where the opposite happened?
Anyway news is not what we trade, so your quote bears repeating.
Good shit as usual CnW.
Good post CnW.I think tomorrow will be a good reason to either sell off or break 11,000 based on what type of jobs # we get. Tomorrow could be a start of a nice run going into next week or the start of a 3 to 5% pullback.
I keep reading things along the lines of “tomorrow’s ugly jobs number” and think a move higher is coming on a serious expectations beat. One would think the above notated ranges would burst one way or the other, but it just keeps on trucking sideways.
Ultimately, the world does end for everyone, except me of course–being immortal and all. So in a sense, the old men from zh are correct.
http://www.youtube.com/watch?v=z2Q7YRDL90E
The first blow-out earnings report that results in a next day sell-off, i am the fuck out of the market. That was the tell the last couple of major dips.
solo cups, no less. haha.
Popeyes 4TW
Indeud.
Huggie bear, that is how it will switch, IMO.
I just spent an hour over at ZH…i feel like the planet is going to implode.
Good advice CnW…there’s no telling how the mkt will react to whatever is put out tomorrow. I also did a recheck of my stox qtrly earning reports. Thx for the reminder!
word j-cole is a champ.
Bought a little TWM.