it's that EPS time again...
Thursday, April 1, 2010 at 07:02AM Well, it's official, we are at a new EPS season again with Q1 end. Maybe, this is what this market needs in order to roll up to higher level from here. Without proper guidance for the remainder of the year, people aren't convinced enough to chase this market any higher in March. At least, this is what it seems like out there at this point. There's definitely buyers on any pullback we've faced in the past days/ weeks/months. In addition, we have enough of a rotation into the equity market to get to where we are at SPX 1170 and stay resilient. Question is, are we ready to push even higher in Q2?
Even though many of the stocks we track aren't really trading at a ridiculous level (valuation wise), we are still not convinced if they'd trade into over-valued phase like in past bull markets. Maybe this time, people are just bit more cautious, at least in this early phase of the bull run. Todays late day selling is really irrelevant as was the morning selling and it would've been irrelevant if buying caused break of 1180 this week in such light attendance volume. It just doesn't feel like it's been productive sitting in front of the trading monitor this week as liquidity gets worse by the day. We feel it and you all probably feel it too. It's okay, it'll definitely get busier after the long weekend.
RIMM sort of kicked off this earning season with a somewhat a disappointing revenue Q, but guidance was positive (+10% higher than EPS expectations) and that is what may really matter this Q in reports. The stock may have ticked down, but futures were climbing at the same time after the closing bell. An interesting divergence, possibly indicating an overreaction on the stock and/or that more important things are on the horizon. ( Also, shows support in 1160/1162 levels). Most folks are more concerned about the event on Friday than anything else and earnings ahead. In most likelihood, people will be chilling out tomorrow and giving it a rest till next week.
Have a great weekend…