Earnings continue to tell a story of what’s working and what’s not in this current market environment. Yesterday we covered the move higher in technology and that trend continued with SanDisk (SNDK) beating expectations and jumping 11% in the after hours market. The semiconductor sector has been moving aggressively off the lows This week and the news from SanDisk will on continue the trend. SMH, HOLDRs Semiconductors ETF should above $31.85 in trading today. Watch for an entry point on the move for a short term trade on the renewed momentum in the technology sector.
Google advertising revenue rose helping push the stock up more than 3% after hours. The data is helping the internet (FDN) sector rise. The gain of nearly 2% on the day was prior to the news from Google after hours. Look for the move above $35.20 on Thursday to hold and the upside to continue to be in play short term. Ebay did its part yesterday to add to the upside in the sector as they beat earnings and produced a solid outlook for the sector. This is one of the sectors to watch moving forward.
Microsoft posted a loss, but analyst still like the stock? In fact, some believe the stock will continue to rise and the future is bright. I tend to agree from a fundamental perspective as the stock should move towards the March high at $33. The sector has been moving higher as well with software setting the pace near term. IGV is set to move above $61.20 and test the recent high at $62.80. Watch as this sector has been lagging and like semiconductors, is in position to help push technology higher still. The move is all predicated on the positive momentum continuing in the broad market going forward.
Oil prices have now moved beyond the $90 mark and closed at $92.97 on Thursday. The move higher started with speculation relative to Iran and a strike in Norway curtailing supply. The Middle East issues are still in play with more geopolitical issues relative to bombings and finger pointing towards Iran from Israel. Thus, fear is fueling the move higher in crude and that bring greed into the picture as well from traders. How high does crude move? To put the speculation in perspective, one headline stated that crude would at $200 by the end of August… let’s hope not! Anyone’s guess currently, but is on the move higher for now. Demand is not rising, but the inventory data has moved lower the last two weeks and that is adding to the fear and push currently in prices. The natural progression is for the stocks to move higher (XLE) and services (OIH) to move as well,. We have seen moves in both sectors, but not equal to the move in crude. The other commodity moving in conjunction with crude is gasoline (UGA). The jump has been worthy of note as well as the gains in the ETF. The key with speculation is to not overstay your welcome. Set your target and take your profit on the move in the sector short term.
Today we start with General Electric and it could set the tone for the broad markets. The manufacturing sector has suffered due to the slowing in the growth as seen in the ISM Manufacturing data. Watch to see how this impacts the trading day.
Economic data remains on the decline as seen on Thursday. The Weekly Jobless Claims jumped unexpectedly after the decline last week, Existing Home Sales were well below expectations, Leading Indicators were lower at -0.3% and worse than expectations, and the Philly Fed clocked in much worse at -12.9 and well below expectations. At some point investors will match disappointing data to the price of stocks looking forward. Keep you focus, maintain your discipline and manage the risk of this move short