Ebay earnings were well received today in the after hours trading but quickly dissipated....like most after-hours trades, it is not very important...most important is that tech earnings for Q3 are off to a great start. This goes well and gives fundamental support for why the strong bullishness in the tech sector. This of course with the weakness in the DJIA and the dissapointing financial sector earnings.
Unlike my counterpart, Rino, i am more cautious about the market. I don't like the divergence between the DJIA and the QQQQ's...it is good that SPY is going with the QQQQ's but they are far from having a strong rally. it is a weak near-term rally for the SPY at best. Not to mention the lack of volume in the rally. I think that this week will close out strong but that this coming monday might bring trouble. I won't be holding any of my large positions into the weekend. The overall market is still undecided, therefore i rather stay clear of any huge negative events that might trigger a big selloff after the weekend.
Ahead of earnings tomorrow, i still like GOOG. I got in on a modest position today and think that it can rally big for at least tomorrow and friday. Earnings rallies for GOOG are usually short lived so i plan to sell it late afternoon friday if the rally goes as planned. Most people are expecting huge things from GOOG so if they can't deliver, look out for a huge drop after earnings.
FXI is another stock i am looking at. I bought an out-of-money call on it believing that it will continue its rally up for at least the new couple of days. It is very volatile so be careful. Strength and optimism in china mixed with a strong rally are reasons to like this ETF. I like EEM for similar reasons....
Potential Trades:
DRYS (bullish)
CROX (bullish)
USO (bearish...its about time for oil to take a breather)
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