• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

Good Earnings News Offsets Negative Headlines

Try not to become too caught up in timing the indices and focus more on managing individual positions.
By JAMES "REV SHARK" DEPORRE
Jan 22, 2020 | 07:07 AM EST
Stocks quotes in this article: SPY, IBM, NFLX, INTC

Market participants have been battling overbought market conditions for weeks, and on Tuesday it looked like worries about the deadly Wuhan Coronavirus would provide an excuse for some corrective action. Asian stocks were very weak on Monday night and there was some selling in the U.S. on Tuesday, but China moved quickly to address the issue and stocks are already bouncing back on Wednesday morning.

Impeachment coverage is dominating most of the mainstream news flow, but the market remains uninterested in the political battle.

It would have been helpful to deal with the extended conditions if the market embraced some negative news, but it refuses to do so. Small-caps suffered a reversal yesterday and had their worst performance since early December, but the S&P 500 (SPY) held up relatively well and is still hovering near all-time highs.

There will be plenty of talk about the coronavirus and impeachment, but what matters most right now is the response to earnings. Both IBM (IBM) and Netflix (NFLX) are seeing good responses Wednesday morning and expectations for Intel (INTC) on Thursday night are quite high.

This market has a particularly difficult dynamic at work right now. There is a very large faction of market participants who want or expect some sort of pause or pullback, but the market remains stubbornly sticky to the upside. The bad news just isn't generating any sustained selling, although it is logical that it should, based on the extended market.

The dilemma is that the market is too extended here to buy aggressively, but it is too strong to sell or short. That leaves many sitting on their hands and waiting for something new to develop. When the market doesn't pull back on bad news, market participants start inching back in and that pushes up the indices. This is classic "Wall of Worry" action, but the big worry isn't the news headlines. The big worry is that this market is never going to have a meaningful pullback.

My game plan is to try not to become too caught up in timing the indices and focus more on managing individual positions. The poor action in small-caps yesterday causes some concern and it is important to stay vigilant and see if that develops further. 

There is some increased focus on stock picking right now as earnings reports hit, which provides a haven for active traders, but yesterday was choppy and sloppy in places and positions have to be managed carefully.

We have a positive open on the way as virus concerns are fading.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark had no positions in any of the securities mentioned.

TAGS: Earnings | Investing | Markets | Politics | Stocks | Trading | U.S. Equity

More from Stocks

Rotation Is No Reason to Turn Away from the Markets

James "Rev Shark" DePorre
Jan 21, 2021 4:45 PM EST

Bears may fuss over the routine consolidation combined with rotational action, but here's how I look at the moves.

Jim Cramer: Housing Is Our Bridge

Jim Cramer
Jan 21, 2021 3:59 PM EST

Do not fear the housing sales boom -- this is good news and I'll tell you why.

Cord-Cutting FuboTV and Advertising Platform PubMatic Are Not Buys Here

Bruce Kamich
Jan 21, 2021 2:59 PM EST

Our look at the stocks of both FUBO and PUBM.

Hyliion Should Keep Truckin'

Timothy Collins
Jan 21, 2021 2:49 PM EST

I see a good trade down the road in this commercial fleet alternative-power truck name.

Jim Cramer: You Just Won Powerball, Now What?

Jim Cramer
Jan 21, 2021 2:24 PM EST

Remember, you only need to get rich once.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:16 AM EST CHRIS VERSACE

    Worst Stocks to Buy for the Biden Presidency

    Biden's take on the minimum wage, likely moves on ...
  • 08:35 AM EST GARY BERMAN

    Thursday Morning Fibocall for 1/21/2021

    SPX (Long-Term View) The 1/20/21 NEW high @ 3859...
  • 11:38 AM EST CHRIS VERSACE

    Best Stocks to Buy for the Biden Presidency

    President-elect Biden's massive stimulus plan, int...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login