9:05am (EST) Futures are pointing towards a lower open this morning as IBM (IBM, $127.98, down $0.37) was down $5 in after-hours last night. The company reported earnings after the close yesterday and is a member of the Dow. IBM’s latest results were amazing but I have been mentioning that revenue numbers will be important. IBM reported a profit of $3.2 billion, or $2.40 a share compared with $2.8 billion, or $2.04 a share, a year ago. Wall Street had expected $2.38 a share. Sales came in at nearly $23.6 billion, slightly better than the $23.4 billion expected but revenue was down 7% from year ago levels. The bar has been set so high for some of the stronger companies that we are now seeing the “sell on the news” type reactions. This can be both good and bad. Good because we might be able to get better prices on stocks we think are going higher. Bad because the market could be telling us something. I think it’s too early to tell and I’m guessing IBM bounces off $120 or holds despite last night’s drop to $123. If IBM fails below $120 then things could get interesting. Another heavy hitter that reported last night was Google (GOOG, $529.91, down $5.41) which jumped $17, or 3%, in after-hours trading. Google also had a great quarter but I won’t bore you with the numbers. I used to love trading Google but once a stock gets over $150 or $200, I tend to shy away from trading the options. You can still make great money trading these types of stocks but the option premiums are a little more juiced and you have to put up a little more capital. Dow futures are down 59 points, S&P 500 futures are lower by 8 and the Nasdaq 100 futures are off by 9 as we head towards the opening bell. I mentioned yesterday that on October expiration day the market has been lower 7 out of the last 10 years. It would be nice to go out on a high note for the week but the pressure will be on the bulls this morning. Subscribers, check the Members Area for the updates…]]>
