Banks led the move again today, this time up.  We’re still in the same channel, so there’s still nothing new to say on the technicals.  You’re probably getting sick of seeing articles about the shadiness of the banks, but here’s another one from the NY Times about the book cooking they’ve been doing this quarter. 

The market never ceases to amaze me.  After a volatile morning, things were pretty uneventful later in the day.  Oil continues to drop, but it’s still in the healthy correction stage and shouldn’t be cause for the oil bears to celebrate yet.  To me, the most interesting news came after the market close, when AMZN reported a knockout quarter despite the conditions in the economy.  I’m a bit surprised that their retail business is still so strong, with their web services only accounting for 3 percent of revenue.  Along with a supposedly much better Kindle in the works and more people shopping online to save gas money, there’s still some room for growth.  Not that I would go long on growth stocks right now, but it’s always good to keep these things in mind.

The market was surprisingly strong today.  After opening down, it managed to bounce back despite a lack of great news.  AAPL managed to claw it’s way back to end just a couple percent down, showing surprising strength much to my chagrin.  I guess it’s good that it’s not hitting a buy point yet, since the market isn’t really in any condition to establish new longs anyway.  Next up on the earnings parade, AMZN, reporting tomorrow after the market close. 

The trading day was fairly quiet most of the day.  BAC started the banks off well after reporting a better than expected profit of 72 cents, still down 41% from last year though.  AAPL had their call after the market close and they reported a great quarter, but a weak outlook leaving their shares currently trading down 10% in the after hours.  They have a history of under-promising and over-delivering though, so I’m seeing this as a potential good opportunity to get in at a discount if it keeps dropping down to support. 

I separated the volume today to highlight the decline, since it’s been hiding behind the falling price recently.  A move in one direction with declining volume typically means it’s just a correction, and that the prevailing trend will resume in the near future.  We’ll have to see how deep the next drop goes.

Friday was a day where the indexes greatly diverged.  Led by GOOG and MSFT, techs tumbled across the board taking the Nasdaq down while the S&P 500 and Dow were mainly unphased.  We’ve surpassed one of the lower highs, but we’ll have to start setting higher lows for it to mean anything.  That means I’m ready to short on the next downswing, but a quick bounce before 125 will be the signal to wait longer.

The day was up a bit, but the volume support wasn’t there again.  While this qualifies as a mild corrective bounce now, it looks like it may be difficult to continue the uptrend with GOOG and MSFT dropping 7% after their earnings calls failed to meet expectations.  It’s interesting to me that if you search for “GOOG” at google.com as I’m writing this, the featured news article that comes up is the Fortune/CNNMoney article titled “Analysts: Google investors ‘freaking out for nothing,’” which goes on to say that GOOG is still doing well and you shouldn’t sell your shares.

Of course if you go to any other news site or aggregator they’ll link you to a boring news release with a bland headline, like the one I had above, or to ones that are slightly more negative.  Even CNNMoney doesn’t have this as their featured article on the topic, as they have the headline “Google profits slow more than expected” with the positive article as the secondary article.  I’m sure Google will say, “it’s all an automated algorithm that selects feature articles,” but it all just seems a little fishy to me.  I actually do think selling the shares is an overreaction to a quarterly report, but I just find it an entertaining reminder to get your news from multiple sources since you never know what agenda each single source is pushing.  That includes any info you may get out of this site since I’ll be the first to admit that I am very opinionated and biased, but isn’t that the point of having a blog?

The bounce came today just as were starting to think the drop would never end.  Wells Fargo turned in a quarter that was above expectations to turn the financial sector around.  While good, there wasn’t as much volume support as you would like to see in a true turn around.  Hopefully this bounce will extend a little further so that we can have a low risk entry point to short aggressively again.

Financials were blamed for another brutal day in the market, even as the stalwart JNJ had good things to say.  INTC and JAVA both had good news after the market closed, so if that’s not enough to at least get the techs bouncing tomorrow I don’t know what is.  The volume on the bounce will be very important though.

More weakness in the banking companies forced another down day.  With IndyMac going down people aren’t asking when the credit crunch will be over anymore, they’re asking which bank will collapse next.  Just like last time when Bear Stearns crash landed, commodities are going crazy once again.  Gold especially is going off the charts.  I still don’t think this decline is sustainable, but definitely pick your spots if you’re day or swing trading since the volatility can be very profitable if you manage your risk here.

After a week of huge pain in the financial sector the market is starting to look even weaker than I thought.  FNM and FRE led the charge downwards with the IndyMac collapse foreshadowing a likely future for at least a few other banking companies.  Anyone that says we aren’t in a recession now must have their head pretty high up in the clouds.  With all of the banking excitement I haven’t even been pointing out the new talks between YHOO and MSFT, but once again they’re going nowhere fast.  The market seems pretty desperate for good news right now so we’ll have to see if anyone can deliver.