Going into today's market I already have indicated that I think BAC will do well.
http://diaryofarepublicanhater.blogspot.com/2014/04/bears-get-upper-hand-after.html#comment-form
I think that unless they miss sharply to the downside-or some brand new disconcerting headwind that no one has ever thought of before comes to light, the market should buy. I think it will easily get back to $17 after earnings this morning-its very early morning right now, just 12:45!-and it might even break out of the strait jacket its been in- even before it sunk like a stone last week to under $16 again-stuck at $17.
I don't think it's impossible that it hit $17.50 or even $18-if it has legs like Citi did which rose again today, the day after its earnings. As I said in the post above I have 90 of the May 2 $17 BAC calls. I got into them very cheap and if BAC can even rise $.50 cents-I think it might get considerably more than this-I should hit paydirt on this one-maybe even more than on my May 2 $44.50 cent Citi puts last week
As usual there are many moving parts. Today despite the strong earnings by KO, JNJ, etc. the bears were able to drive the market lower for a good part of the day on worry about disappointing manufacturing and housing numbers-however, just as I expected, the market brushed away the concerns for now. There are a number of possible catalysts for the bears.
1. Even more heightened tension in the Ukraine. The markets hate this sort of thing as there's just no way to quantify the problem-ie, they can't solve it too easily.
2. China GDP. On this we can already say there is good news-China GDP beat estimates.
http://www.cnbc.com/id/101583350
3. There will be even more Fedspeak today which is always irksome-it means the market is less into it.
4. Nasdaq stocks-the worry would be they drag down the rest of the market. After getting close to bear territory, it snapped back hard today.
5. More reports that show the housing industry shrink.
http://diaryofarepublicanhater.blogspot.com/2014/04/bears-get-upper-hand-after.html#comment-form
I think that unless they miss sharply to the downside-or some brand new disconcerting headwind that no one has ever thought of before comes to light, the market should buy. I think it will easily get back to $17 after earnings this morning-its very early morning right now, just 12:45!-and it might even break out of the strait jacket its been in- even before it sunk like a stone last week to under $16 again-stuck at $17.
I don't think it's impossible that it hit $17.50 or even $18-if it has legs like Citi did which rose again today, the day after its earnings. As I said in the post above I have 90 of the May 2 $17 BAC calls. I got into them very cheap and if BAC can even rise $.50 cents-I think it might get considerably more than this-I should hit paydirt on this one-maybe even more than on my May 2 $44.50 cent Citi puts last week
As usual there are many moving parts. Today despite the strong earnings by KO, JNJ, etc. the bears were able to drive the market lower for a good part of the day on worry about disappointing manufacturing and housing numbers-however, just as I expected, the market brushed away the concerns for now. There are a number of possible catalysts for the bears.
1. Even more heightened tension in the Ukraine. The markets hate this sort of thing as there's just no way to quantify the problem-ie, they can't solve it too easily.
2. China GDP. On this we can already say there is good news-China GDP beat estimates.
http://www.cnbc.com/id/101583350
3. There will be even more Fedspeak today which is always irksome-it means the market is less into it.
4. Nasdaq stocks-the worry would be they drag down the rest of the market. After getting close to bear territory, it snapped back hard today.
5. More reports that show the housing industry shrink.
The market is trading more on technical levels as opposed to fundamentals, but ultimately the fundamentals will trump everything, as that's the environment you can project for corporate profits, and corporate profits are going to matter more than multiple expansion.
ReplyDeleteThank you Tips, you may well be right. In the short term they can trade on technicals though.
ReplyDeletewit
I think on fundamentals BAC looks decent right now-the loss was based on the settlement with FHA though true the payoff was larger than the market expected.
Still yesterday the market mostly focused on just the fact that it technically showed a loss.