Frankly, if INTC reported a bullish forecast we doubt it would have anything close to the reaction IBM caused just hours before. Reason being the market road showed there was dangerous curves in the making all day. We underlined the ECO numbers heading into the week, the importance of them was overwhelming. The possibility also existed they could mute any positive earning reports from the big corporations. This remains the case as we still have a plethora of economic data to be released this week that could drain this market even further. The tap was opened by the PPI/retail, the flood ensued..."Still as of today, we have a flood of ECO numbers this week to deal with that will either salt the roads or make them slippery once again". Simply, any walk up the hill was flooded and iced!. Slippery when wet it is going to be even more this morning following INTC #'s and as the case with anyone living in a winterly climate, you'd know not to come out and try to drive through the mess outside. In the trading world we will exercise this and not come out and play. We're going sit on the sidelines and will only watch out the window, even if the skies clear some it is very doubtful we'd exercise the option of getting in on what is most likely another futile attempt of a rebound rally. Any rebound in the short term will be sold off and we think it will be just another opportunity for the shorts to load up. It is unimaginable to see where this market can get a leg up as of this morning. The banks with the help of C and potentially more writedowns cooled any bottoming action for the moment. The retail figures released showed the consumer has been screwed back to 2002 as numbers have not been at those levels since. Geez, even Jobs couldn't pull a I'Rabbit out of his hat at AAPL. Then finally AH's INTC crushed hopes of living on the hope of earnings getting us out of this mess. So what's left that could get us back, even if for only a whipsaw move up?. Well, we noted this a while ago and yesterday this became an almost inevitable outcome and that is helicopter Ben giving the market a rate ease before the end of January. Still ..after yesterdays hammering this notion doesn't have the same flavor now to us. A market going to hell feeling that flushes the market to much lower lows might the only way to go now!. A smackdown is needed and one at the bell off INTC is not going to be enough. Maybe the CPI can help add to it.
There is no reason to moan about the bloodbath in individual stocks, but it never hurts to remind ourselves of what momo stocks are all about. The rides up have been incredibly enjoyed, but to stay in love with them and live with them when they have lost steam is a nasty divorce in the making where you are most likely to end up holding the bag. This was everywhere yesterday in momo stocks of the past year or more. The lights went out on solars as 10% plus losses were all over the place. The poor shippers had a big drop in their BDI index and sank!. The Chinese stocks fared not much better, nothing was more proof of a momo stock killing than the reaction to one of our biggest momo stocks of the past 2 years as the EDU classroom had the kids yelling fire as they ran out of the classrooms. All this on a headline that didn't read that bad....Reports Q2 (Nov) earnings of $0.10 per share, excluding share-based compensation, $0.02 better than the First Call consensus of $0.08; revenues rose 50.9% year/year to $32.6 mln vs the $30.7 mln consensus. Co issues in-line guidance for Q3, sees Q3 revs of $42.1-44.2 mln vs. $44.22 mln consensus. This just serves as a reminder here now as to what we have said and that is don't chase the headline, let the market show you the way first and if there is a CCall, either trade some before and get out as the call starts or jump in after unless you could follow the minute ticks while the call occurs to get a feel.
Also...be careful of firms coming in today reaffirming their belief in the solars as an example. They've been doing it almost daily since their highs.
Anyways...better to be safe than sorry at this point. If you're not a daytrader or if you can't monitor your plays all day.. it is best to sit out. Definitely holding overnight is not a option as it stands now. Take a breather.