Yesterday, for most of the session, the market traded sideways. And then along came Nouriel Roubini to scare the ole Bears right into another big camping pow wow . The economist said that the worst of the financial crisis is over – that the recession might end sometime this year. Some of those ole bears got so frightened of being left out of the market merriment that they simply caved in and joined, pushing especially metals, homebuilders and semiconductors higher.
But today is a new day. There is a lot to think about, a look of earnings numbers and guidance to consider -- and options exp. And never forget that traders are incredibly fickle.
We have a bit of a mixed bag today. An influence on the market today will undoubtedly be GE, which beat on earnings and missed on revenue – and Bank of America, which reported that earnings dropped less than expected. Both premarket were looking weaker. Also, Citigroup, which beat analysts’ expectations, indicated higher.
In view of how far the market has surged this week, weakness is anticipated – but still, the Bulls must be afforded some benefit of the doubt. There are likely going to be some short positions to take here before too long – but it’s never a good idea to arrive at the party too early. A nice rest could allow charts to look more compelling to the long-side. Again, easy does it – we will wait for situations and prices to come to us.
(A reminder -- weekend reading will be posted tomorrow.)
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