Tänane päev on algamas pisut rõõmsamate uudistega kui sel nädalal kombeks. Maailma ühe suurima kontserni General Electric (GE) tulemused ületasid ootusi nii käibe (37035M vs. ootus 35592M) kui kasumi (EPS 0.38 vs. ootus 0.37) osas - aktsia on eelturul 1,58% tõusnud ja suures osas tänu sellele leiame ka futuurid 0,2-0,6% plussis.
Tarkvarasektoris on rea kasumihoiatuste järel Computer Associates (CA) kinnitanud oma kvartali kasumiprognoose ehkki vähendanud käibeootusi, aktsia on eelturul +3,10% plussis, mis näitab kuidas viimastel päevadel paljukannatanud sektor januneb vähegi positiivse alatooniga uudiste järele. Sektor näitab ka kosumise tundemärke kui eile kasumihoiatuse andnud Siebel Systems (SEBL) on avanemas +2,88% kõrgemal eilsest jne.
Rev Shark:
"What is needed, rather than running away or controlling or suppressing or any other resistance, is understanding fear; that means, watch it, learn about it, come directly into contact with it. We are to learn about fear, not how to escape from it."
-- Jiddu Krishnamurti
Yesterday we experienced once of the most solidly negative market days we have seen all year. There was nothing particularly good about the action. The fundamental news was bad and the technical action poor. Buyers showed no inclination to hunt for bargains.
Days like that yesterday inevitably lead to contrarians searching for signs of a bottom. They stand back and attempt to objectively measure the degree of fear and pessimism in the market. When they feel that it is so great that everyone who is going to sell has already sold, they conclude that a market bottom is near.
What is interesting about this market-timing approach is that it requires that you be able to weigh market emotions in a very cold and logical fashion. That certainly is an ideal goal but an extremely difficult one for most market participants.
If you are active in the market, you very likely have a position long or short. If you find yourself long on a day like yesterday, it can be extremely hard to set aside your fear and carefully measure the prevailing mood of the market. The natural inclination is to hope that a bottom is near. When you evaluate things, it is extremely difficult to fully set aside your biases.
Our inherent biases lead to a tendency to underestimate how far the market can move once it starts to trend. We start to impose our beliefs as to what is "reasonable" in the market, but because we already are invested, our evaluation is colored by our subjective feelings of fear and greed.
My point is that we need to be very careful when trying to determine whether the market is at an emotional extreme and ready for a turn. It is tremendously easy to let our holdings influence our thinking. After all, we "know" that the stock we are holding is a great pick and it's only a matter of time before the rest of the market realizes what a great bargain it is at a lower price.
So has fear reached an extreme? I don't think so. There is still plenty of hope that earnings season will be strong enough to turn the tide back up. The specter of some solid reports is beckoning, and that is what is preventing a real washout from occurring.
The persistent flow of bad news has certainly taken a toll on investor sentiment in recent days, but earnings season still holds sufficient promise that the bulls have not given up. The bounce this morning on the traditional "one cent better than expectations" report from General Electric (GE:NYSE) has improved the mood tremendously after yesterday's gloom, but the bulls need more of the same from other bellwethers if they are going to shift the trend.
There is an old Wall Street saying, "The trend is your friend." Which is simply a way of saying that we shouldn't try to anticipate turning points. When a solid turn does come, there is always plenty of time to join the party. There is no need to take needless risk by being overly anticipatory.
We have a bright start to the day. Can the bulls run with it on a summer Friday in front of a flood of earnings reports next week? We will soon find out.
G.B. Smith:
