Today’s rally was a continuation of yesterday’s rally. Google (GOOG) reported earnings after the bell and beat estimates. Google also announced they are planning an unorthodox stock split (in the past they had said they would never split the stock). We should see some more upward movement in the markets this week. However, next week is a big week for earnings and we could see some more downward pressure continuing in correction mode.
All three indices ended in the green all over 1% gains.
Many are calling our current trend as a shallow correction opposed to a deep correction. Meaning investors need to be ready to buy equities on the dip and be ready to buy on the days when the market comes down intraday.
Today we saw an all out “long” play in the markets. Others call it “risk on” opposed to “risk off” with all the heavy correlation across the different markets and asset classes. Plus we saw more QE euphoria being baked into the market. Most speculate that if there is an additional round of asset purchasing by the FED it will happen somewhere between June when operation Twist ends and the November election.
Oil was up 94 cents at $103.64 a barrel.
Gold continued to rise, seeing a $20.50 uptick to $1,679.50.
The banks could derail the rally this Friday when JPMorgan (JPM) and Wells Fargo (WFC) report earnings. It will be interesting to see if traders stay long into the weekend.