An imputus on trading today will be reaction to the Goldman Sachs earnings report -- which exceeded analysts’ estimates. Expectations had already been high, especially after Meredith Whitney’s call yesterday.
If there is an open sharply higher and then within the first hour a disappearance of those gains, be careful.
Bloomberg reports: Net income in the three months ended June 26 was $3.44 billion, or $4.93 a share, the New York-based bank said today in a statement. That surpassed the $3.65 per-share average estimate of 22 analysts surveyed by Bloomberg and compared with $2.09 billion, or $4.58 per share, in last year’s second quarter.
And that short squeeze that we mentioned yesterday caught folks off-guard. It seems that some traders had theorized that the break below S&P500 880 sent the message that it was time to go short. But as we have been saying all along, this is not a market to be trusted and it is a mistake to assume anything too quickly.
Patience, easy movements and waiting for prices to come to you is the way to collect rewards.
But for as long as it lasts, after four weeks down it felt awfully good to see so much “green” on the screen. But a little bit of green is still no cause for getting cocky and thinking that all is well. At this moment, the bears still have the edge -- until we see otherwise.
We are watching those oversold crude oil and precious metals to see how they react.
The question will be whether yesterday alleviated oversold conditions sufficiently that negative earnings reports will push the market lower, or whether we have worked off enough froth that the market will move higher again. Our thoughts are always the same – we will watch, wait for clear signals and make certain that we feel comfortable about what we do.
Tuesday, July 14, 2009
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