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MV Weather Report: Earnings Bring Bears Out of Hybernation


Rain or shine, we review the day's biggest stock stories.


So far earnings season has been greeted with a muted reaction by investors.

Take today for instance, last night Google (GOOG) reported very strong numbers and today it traded higher by 3.76% to 549.85. Then this morning, Bank of America (BAC) reported a so-so quarter and it sold off by 4.64% to 17.26. Goldman Sachs (GS) got the same treatment yesterday.

Today on the Buzz and Banter, Professor Sean Udall gave his thoughts Google's quarter.

"As I stated yesterday ahead of the call, I didn't expect a disappointment from Google (though I was prepared for it). To reiterate, I see the stock to new highs ($800's number on my US macro thesis) and think this was it's last bad quarter as Mobile search, video monetization and the "Android" machine will be full engaged starting next quarter and beyond.

"That said, it won't be a straight line up and I'll look to buy any $15-20 pullback up to the $600 level now for trading opportunities. Ill hold my core position for eventual targets.

"The most compelling thing today? We are truly seeing differentiation with GOOG rising meaningfully while the broad market sells off. Those that ignore this effect are at peril and while those that embrace this should once again be able to run profitable long and short books simultaneously."

Google's strong quarter wasn't good enough to keep the major averages up today. The S&P 500 closed well off its lows of 1081, closing lower by -0.81% to 1087.

Today on the Buzz and Banter, Kevin Depew gave his thoughts on the market.

"As the post on the bullish percents indicates, the momentum of this rally remains largely intact. While the S&P 500 and Nasdaq-100 bullish percents have both reversed down, they have been slowly edging higher and could even reverse back to positive.

"The reversal up - if it occurs - would raise the levels on the charts where the next round of sell signals will occur.

"What does this mean? The larger bullish percent groups - the NYSE, Nasdaq Composite and Russell 2000 - each with thousands of stocks, have not yet reversed down to signal the momentum driving this rally has concluded.

"Consequently, as we edge closer to year end, expect underperforming funds and institutions to potentially press the panic button and chase performance, thus further boosting the rally.

"This scenario fits with the monthly DeMark indicators as well, and I'll have a post on that upcoming."

I have to agree with Professor Depew. Once we get through earnings season, the funds not beating the S&P 500 will start to have performance anxiety.

Well, I'm Bronx bound this weekend, let's go Angels.

Have a great one!

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Position in BAC

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