Wednesday Morning Thread

Gator's Chart of the Day: SPY

The daily chart of the SPY has three arrows; green, white and red.  The colors have no significance other than differentiation.  The green arrow points to the vertical line that marks the beginning of the January earnings season and the red arrow points to the beginning of the current season.  The white arrow marks 2 months from the green arrow where momentum from the good earnings reports died.

So far earnings have been very good this season.  Even AA and C surprised to the upside.  GOOG was not bad but the stock split has traders confused and wary of what Eric has up his sleeve.  INTC was good and CSX had great numbers too.  So we have materials, financials, social media and semiconductors represented.  The home builders have been decent lately and reports of improved housing demand from Florida suggest we could be near a bottom in at least some of the worst parts of the county.

Could the red arrow mark the beginning of another 2 month run and new multi-year highs?  Maybe, but it could also be pointing to a developing right shoulder.  Europe is in focus Thursday with Spain's bond auction and we have not managed two consecutive up days since the market peaked a couple of weeks ago.

I may be missing the beginning of the coming run (if it is to be) but I cannot build positions in a choppy market.  I'll continue to be very selective and mostly day trade until I see a trend.