Trading has been choppy today as the market awaits Google’s (GOOG, $594.85, up $5.85) earnings announcement after the bell. The Dow has seen both sides of the ledger having traded to a high of 11,136 and a low of 11,096. The index is currently down 2 points to 11,120. The S&P 500 is down a point at 1,209 while the Nasdaq is up 6 points to 2,511.
The market will also get some key numbers from Bank of America (BAC, $19.55, up $0.15) and General Electric (GE, $19.60, up $0.25) before the bell on Friday so there is a little case of chicken by both sides to make big bets before this three-headed monster talks to Wall Street.
We believe the the latter two companies will get an “A” on their report cards but Google is the wild card.
Economic news has also weighed on stocks today. For the second straight week, we got a weak employment number as the government said first-time claims for jobless benefits rose by 24,000 to 484,000 last week. Pencil pushers were looking for a drop to 440,000.
The Federal Reserve chimed in this morning and said industrial production rose 0.1% in March versus expectations for a 0.7% pop. Meanwhile, the Philadelphia Federal Reserve said its index of manufacturing conditions rose to 20.2 from 18.9 in March. One-out-of-three normally doesn’t cut it but we have been telling you this market is shaking off bad news and rolling with the punches.
And wouldn’t you know it…One of the talking heads said today, “with M&A action picking up”…referring to Apache (APA, $105.35, down $2.71) buying Mariner Energy (ME, $25.39, up $7.30) today. Didn’t we just talk about this in our morning update?
The warning signs are coming that some unexpected curveball could be coming but we are going to go out on a limb and say the market has a blowout day tomorrow. As many of you know, April options expire on Friday so the action is likely to be intense as bulls and bears battle over key strike prices. If GE, Bank of America and Google can all pull Aces then we could easily see the major indexes add 1%-2% tomorrow.
We are positioned for a move higher with many of our current trades and timing will be crucial on when we take our profits on our positions. We don’t want to be overexposed if there is a pullback but we also don’t want to be underexposed if we get a “blow the roof off the house” type of rally before any pullback or correction.
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