On this last day of the month, the market is set up for either an April shower or a blooming May flower to be it seems!. It's that simple as once again we are at the mercy of a FED decision and to make it even more interesting a GDP number before. As usual the days before a FED decision provide lacklustre, choppy tight trading as traders become hesitant to make any volume moves. Today will be one interesting day, but of course as often happens something else is on the horizon to fuel more speculation and that is the Friday job report!. Ahh, it never stops, does it?. So, basically if you are constantly defensive and weary of all economic data, you might as well never trade in this environment the last year!. The most important aspect today may be the reaction of the USD after the FED decision. The USD has been gaining some ground on the Euro/Yen and what we are witnessing is gains in the Dollar index are causing a retreat from the commodity/materials sectors. Yesterday, we had oil down almost 3%, Gold off about 2.5%, Materials overall -3.1%. There is a lot of noise that a stronger dollar will cause commodity stocks to fall further. We think this is just that in the longer term..a whole lot of noise!.
On the other side of the trade yesterday, it was only the credit card processors, MA and V that provided any kind of excitement. Both companies beat handily their estimates, but it wasn't until MA reported a 30% beat that V's under 20% beat gained interest after getting beat down in the previous AH session. Looks like we'll have another nice Q to trade these names.
The last 48 hours, we've seen a flurry of DJIM stocks announce earnings... some like MA V FLS CMP X and FSLR today are reporting great numbers, but what you are running into is something called 'expectations', in some cases unrealistic expectations. This makes trading these at first sight difficult and what you should only be doing is going with the trend after indication it's all clear or you'll find yourself having a lunch with a CMP to the 50ema or worse. If we didn't think these were powerful EPS companies, we would not have been playing them for months. The point is getting ahead of the herd as we've done and let others worry about playing these stocks immediately off the next earnings.
Okay...here we go!. Strap yourself in....or will this be just more unnecessary hype we've had to go through?