Tuesday, April 21, 2009

Earnings Fail To Impress

Earnings are having a hard time impressing this market. It seems that traders are dismissing the euphoria that has dominated the market for the past six weeks. Was this really a surprise? Were we really expecting that after the past 18 months of dismal economic news people were not going to take profits? I wasn't. I missed a lot of this rally as I expected it to end faster than it did. The futures are down this morning and I am not calling for us to retest the lows of the year, but I do expect the S & P to go test 790.

We are in the area where you can start making your buy list and wait until the market affords you an opportunity to get in. Personally, I think a great way to play the China recovery story is thorough FCX. I think it may fall with the market for the next few sessions and give us a strong buying opportunity.

I am still negative on many healthcare stocks, even though Boston Scientific reported stronger than expected earnings this morning. They are one of the best in the space and I would not advocate selling them short, but there are others such as EMS that I like as short candidates.

We will have a hard time with clarity until we get the final results of the bank stress tests. Other than the news factor, I could care less how these banks do with these tests. I would prefer to stay away from the space and just see what kind of news value these test results bring.


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