Coolhand's Market Analysis

The bulls managed to put together some follow through action today, which was also Options Expiration.

Early volatility was probably a result of disappointing corporate news. Google missed Wall Street's earnings forecast, which resulted in a -8.26% loss for the stock at the close of trading. Infosys Technologies also disappointed with its downside guidance and dropped a steep -13.42%. Bank of America also had a disappointing report, but wasn't punished nearly as much as its stock only fell -2.36%.

So while earnings season is only just getting started, the market overall seems to be taking earnings misses and downside guidance in relative stride.

On the economic data front, March consumer prices were up 0.5%, which was on target with expectations. Excluding food and energy, consumer prices were up a more tepid 0.1%, which was just below economists target of a 0.2% increase.

The April New York Empire Manufacturing Survey posted a reading of 21.7, which beat expectations, while the preliminary April Consumer Sentiment Survey posted a reading of 69.6, which was more than 66.5 economists were looking for.

March industrial production was up 0.8%, which handily beat projections, which capacity utilization came in at 77.4%.

On to the charts:



Both NAMO and NYMO have flipped back to buy conditions.



NAHL and NYHL also improved and have flipped to buys as well.



TRIN and TRINQ remain in sell conditions, but are not far from neutral readings.



BPCOMPQ ticked just a bit higher today, but remains in a sell condition.

So 4 of 7 signals are back in buy mode, which keeps the system on a buy.

While the signals have improved today, trading activity was heavily influenced by Options Expiration, which means we can't assume the market has found a short term bottom, although on the surface it seems it has. Our sentiment survey remains in a buy condition for next week, so that's a plus for those who are holding stock positions. But overall sentiment in various pockets is on the bullish side, which could mean we continue to chop around in volatile fashion.

For now, I continue to look for higher prices down the road.