Well, the markets are up overall during this earnings season, but not for the first time recently, this week we’ve witnessed a breakout followed by an immediate reversal. With so much uncertainty out there, combined with inconsistent earnings results, it’s no wonder we’re witnessing whipsawing markets, but with all that said, the opportunities are still out there.
My prognosis for the markets remains unchanged. In the short term we’ve had some upside, but medium term I see challenges ahead.
SPY
Tough one to call as it’s broken back below its August high, and the OVI is struggling to stay above par. Bearing in mind the S&P’s significant October rise, you’d have expected a more enthusiastic OVI, but for some reason it’s reluctant. Time will tell us why very soon.
AMZN
First AAPL misses and then AMZN misses. However I would urge you to keep AMZN on your watch list. In the short term earnings may come under pressure as the company throws resources at its breakeven/loss-leading Kindle and tablet business. But the quid pro quo here is that people are buying eBooks like never before via these devices, and eBooks are very high margin business.
Right now the stock looks a bit tired as the market digests what may happen in the next two quarters. Personally I think AMZN will get it absolutely spot on. BUT … you can’t buy it right now because the chart says you can’t – you know the rules!
GS
The likes of GS and BAC are consolidating just below their potential breakout points. They still have much to prove though.
GLD
XOM
Earnings tomorrow. Last week I mentioned that I’d like to see this consolidating before earnings … well, it’s obliging!
YOKU
Earnings are in the next couple of weeks on this Internet stock which is showing a positive OVI while forming a rather constructive base. Options volatility is very high with this stock but has been since July since which time the stock has halved due to poor earnings last time around. However, a rise above $23.75 would be interesting, though you’ll need tight stops. Also be careful before earnings.
Once again, I must emphasise, if you’re going to trade during earnings season, you MUST check to see if your stock is reporting at time you’re considering your trade. For earnings news there are two links – you can simply change the stock ticker within the URL address or on the web page itself:
http://finance.yahoo.com/q/ce?s=AAPL+Company+Events
http://www.earnings.com/company.asp?client=cb&ticker=aapl (scroll down to the Earnings Releases header bar)
All the best
Guy