Market outlook
Time to come back on our global view from the beginning of the week =>
Posted on April 15, 2008
Filed Under French Market, Stock Code Trading, US Market |
The situation is simple: Q1 season has come with 200 publications this week. If more than 60% can beat estimates, it will be a bullish trigger and I expect a good run of the stock market off season. In short, if in the middle of may, SPX is still above march lows, with a a reasonnable beat rate for Q1’s (let’s say above 60%), we can expect a bullish run for a few weeks…
Right now, my odds favour this scenario even if I stay deeply pessimistic on the longer term, before end of year… just one number P/E ratio for SPX is above 20 and the fair value of the index for a P/E of 15 would be around 950 pts!
But, let’s take events one after the others…
Many decisive Q1’s are already published with excellent news from CoCa, Google, INTC, IBM and bad but not dramatic from banks JPM, MERRILL…
We will make a complete overview soon with most important numbers news on the street!
The most important for today is give solid elements to answer the basic question: how will the market read the tapes?
* Results are not so bad! we enter in a profitable territory, probably a beat estimates rate above 55%/60% if everything goes on like this week…
* the VIX has plunged below its SMA200 daily (remember our last post on the topic), which is a very positive sign for Stocks!
http://www.safetradingblog.com/stock-code-trading/a-word-on-the-vix.html
Our odds still favour a clear rebound, as anticipated at the beginning of the week, looking @ more hidden variables…
Do not miss the point: there will be some strong resistances on the way up, and we are still in a bear market territory… However, in the present period, we can make bets on the upside…
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Debrief @ 16h =>
CAC40 ~ +2% and US ~ +1.5% with NASDAQ leading the market @ +2%, which is a very positive trigger… NASDAQ/DOW is up!
We have bought AAPL & INTC at the open to follow our analysis above for the very short term…
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Check our risk profile here:
http://www.boursematch.com/membre-stats.php?membre=Safe-trading
We are essentially keeping a reflection of our trades on this site, but the conditions are not so favourable: a long delay to get the execution, limited nb of products etc. However, it gives a reasonnable indication of the risk exposure and typical style that the StockCode can generate…
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To get a complete view of results via conference call transcripts, we give a short list of web links below (find more @ seekingalpha.com) =>
C: http://seekingalpha.com/article/72954-citigroup-inc-q1-2008-earnings-call-transcript
GOOG: http://seekingalpha.com/article/72846-google-inc-q1-2008-earnings-call-transcript?source=wildcard
IBM: http://seekingalpha.com/article/72588-ibm-q1-2008-earnings-call-transcript?source=wildcard
INTC: http://seekingalpha.com/article/72435-intel-q1-2008-earnings-call-transcript?source=wildcard