It was another chaotic day of trading action with Facebook (FB) causing problems for certain areas of the market. Breadth was OK and many individual stocks traded in the green. It's been choppy and sloppy lately and even when the indices are positive the momentum has been tepid.
I don't like this action much because of the inconsistent way individual stocks are moving. There aren't any good leadership groups and the pockets of momentum have been poor.
The market doesn't care what I like but it is keeping me inactive and in a high level of cash. Technically, nothing is wrong with the indices but individual stocks are a mess.
The earnings news hitting Thursday tonight is likely to keep the market in this choppy state. Amazon (AMZN) made a big swing following its report. The stock dipped for about half a minute and then went green. The company had OK revenue and EPS, but blowout operating earnings. The operating forecast for next quarter has jumped substantially as well. While there is a lot to digest in that report, it isn't the disappointment that Netflix (NFLX) or Facebook (FB) were.
Intel (INTC) is another very important report and it is trading down initially, although it beat on the top and bottom lines and raised guidance. That is not the sort of price action we want to see in the chip sector on seemingly good news.
Amazon is going to suck up the media attention tonight, but we have to look at the broader market to appreciate what is really happening. The indices are deceptive and the underlying action is not very impressive. The best course of action is to just keep slogging and hope that conditions change.
Have a good evening. I'll see you Friday.
Facebook and Amazon are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.
