Stock Report for January 22nd
Is this market headed to a blowout? When looking at the technical’s this market still appears to be quite bullish, however is this still a bull market? Looking into insider trading we have seen quite a bit of selling which makes us think, what do the big boys know that we don’t know. Shares in companies such as Hewlett-Packard, Research-in Motion, Netflix, and Herbalife were all thought to be left for dead and yet we have seen significant rallies in all.
Earnings continue to beat expectations however expectations have been dropped to such a level that it was not difficult for them to beat. Google saw significant movements following their earnings release after market close trading up over 5% on better than expected results. Tomorrow’s earnings release from Apple will play a key role in the markets as last year’s market leader continues to act as a Bellwether for the markets in general. We will look to see the results of December and January’s sales, and more importantly their future expectations.
During President Obama’s inauguration it was very clearly noted the tone of his speech which makes us expect more government intervention into the economy, more government spending, higher taxes on the rich, which does not seem to be a recipe for prosperity. The republicans have been backed into a corner as nobody seems to have the brass to take a stand and point out the dangers the country Is facing with its enormous debts that have been accumulated.
We need to watch closely as to how the budget deficit progress during the coming year. If we get to the $1.7 trillion mark we don’t expect the market to act to kindly to that. From a fundamental stand point everyone is in a state of flux everyone is anticipating that the housing market will continue to move and that the economy is stronger than it appears and that corporations will continue to make bag full’s of money. Markets can be wrong but the problem is that they can be wrong for a long time; we just don’t see the present trends which have been financed by the Federal Reserve’s continuing.
As long as the Federal Reserve continues to buy bonds we could see another few months or even a year or two, however we are convinced that we have seen the height of the bond bubble. We are very causes on the overall market however as traders we look into specific movements of individual stocks.
For those breakout traders out there here are a couple of ascending triangles that broke out today. PQ, ENDP,