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9:00am (EST)
The bulls got off to a good start last week following Monday’s advance which was led by Tech, the Financial stocks and, believe it or not, the small-caps. After a quick test to support, the bulls recovered early and ended the day with a win as the Russell 2000 led the way higher.
Perhaps the early test to support was an omen because the bears were out in force on Tuesday. Fresh worries over China’s pending “slowdown” pushed the market lower by 1% before the indexes reclaimed over half their losses. Although there was some dip buying, the first layers of support were scratched as the bears seemed to be waking up from a nap.
Wednesday’s action was like watching paint dry as the indexes traded in a tight range before ending the session mixed. The Nasdaq was the only index that finished higher as Wall Street seemed hesitant to place bets ahead of Thursday’s economic news.
Futures were weak Wednesday night and when we woke up for Thursday’s action we knew it was going to be an uphill battle for the bulls. China was back in the news, along with France and Germany, which reported weak manufacturing data ahead of the bell. Economic news here at home came in better-than-expected as jobless claims continue to move south and are at 4-year lows. The good news wasn’t enough to offset the bad as the indexes ended the session down 0.5%, on average.
The bears had a nice lead going into Friday and were working on the second layer of support an hour into the trading session before the bulls started buying at the lows. The buying lasted into the afternoon but it wasn’t enough as the bears won the week.
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Google (GOOG) Beats Estimates, Shares Crack $600
Friday, July 20th, 2012
9:00am (EST)
The bulls won their third-straight session on Thursday and made another run at upper resistance levels but ran out of gas midday way through the session. The surge during the first half of trading was enough to allow them to coast to victory as the bears never got it in second gear.
The Dow added 35 points, or 0.3%, to finish at 12,943. The blue-chips tested a high of 12,977 at lunchtime after dipping to a low of 12,889 shortly after the open. The bulls made a push at 13,000 and if cleared it could be smooth sailing up to 13,200. We mentioned yesterday if the bulls fail to clear this level by the weekend there could be a test back down to 12,600 over the near-term.
The S&P 500 popped 4 points, or 0.3%, to settle at 1,376. We said a close above 1,375 would get 1,400 into play and yesterday’s high was 1,380. The low was 1,371. The 52-week high is 1,422 which was hit on the first trading day of April.
The Nasdaq led the way higher after jumping 23 points, or 0.8%, to close at 2,965. Tech touched a top of 2,976 and is a little over 1% away from taking out the 3,000 level. Unlike the Dow and S&P, the Nasdaq held green all day and above 2,950 which was bullish.
The Russell 2000 fell 3 points to finish at 802. The small-caps traded to 808 and we said a close above 810 would be bullish but the negative close could be another clue the market is topping. The S&P Volatility Index ($VIX, 15.45, down 0.71) fell another 4% and has reached our mid-teen target. There is still a chance the VIX could push the low teens and that would mean the S&P 500 is at 52-week highs.
After the close, Google (GOOG, $593.06, up $12.30) and Microsoft (MSFT, $30.67, up $0.22) came in with mixed results but shares of both companies got nice little pops in extended trading.
Google beat estimates and had a huge beat on revenue by $70 million. Microsoft posted its first ever quarterly loss after taking charges for its online division and an expensive, money losing acquisition. However, Mr. Softie posted strong sales as revenue rose 4% and topped $18 billion for the quarter. Google was trading above $600 when after-hours trading closed while Microsoft was above $31. Both levels are holding before the bell.
You would think futures would have gotten a nice pop but they were weak all night. Shortly after 1am (EST), Dow futures were down 33 while the Nasdaq futures were flat as a pancake. They have gotten worse this morning as we head towards the opening bell and look like this: Dow (-66), S&P 500 (-9), Nasdaq (-8).
We have an important chart to show you this morning on a stock we have traded options on 4 times over the past few months. All of the recommendations have been put options and have made our subscribers 172%, 144%, 29% and 6%. Shares are right near resistance again so let’s go see what the chart looks like inside the Members Area.
Tags: economic news, GOOG, option trading newsletter, YHOO
Posted in Google, Market Analysis, Market Commentary, Yahoo / Microsoft | Comments Off