Today Market Madness

It's not like as I expected yesterday, today the market moves higher nearly touches +200 point in the afternoon. Even JP Morgan's earning release plunged 53% compared to the same period on the last year. But the earning declined is less then analysts estimated. However it does not mean that financial problems have been over. Capital market remains under stress. JPMorgan has posted more than $12 billion of writedowns, losses and credit provisions on mortgage-tainted assets through the second quarter, a fraction of the $43 billion at Citigroup Inc., which reports earnings tomorrow. Coca Cola (KO) also reported its earning slumped 23% but beats analysts estimated. If 40-cent impairment charge excluded, earnings would have hit $1.01 a share. Analysts polled by FactSet had estimated earnings of 95 cents a share. How could we say that profit fell 53% and 23% are well?

While oil prices have been falling for three straight days to down below $130 for the first time since June, it also drives the market bullish sentiment. Additionally, As result of Naked short Policy from SEC, it also gives more pressures to short seller and makes short seller are getting squeeze. But peoples like John Najarian still have an alternative way to short market over buying put options contract.

As many analyst said I think the bull market is just a temporary contraction as the market reaction to currently oversold condition, let's see on the S&P 500's weekly chart below:


Now, let's look the AAII Bull Ratio below. It indicates that bullish sentiment is still worse.


Volatility index below also indicates that the market is not over panic yet compared to March high.


Finally, while the market pops I consider to open short position on the JP. Morgan (JPM), let's see the chart below:



Related Posts :

Intraday Review: Stocks Soar on Drop in Oil

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