(By Jordan Kahn) The market is higher in early trading after being down for 6 straight days, which is the longest streak since summer 2011.
The Nasdaq is underperforming after earnings reports from both Cisco (
CSCO) and Priceline (
PCLN) failed to impress. CSCO beat by a penny but lowered guidance and its stock is down -8.7% currently. PCLN beat estimates by a wide margin, but didn't raise guidance and its stock is down -4.5% so far.
Asian markets were mixed overnight. China's trade balance figures showed imports and exports below expectations. In Europe markets are higher after the Bank of Spain nationalized Bankia by taking a 45% stake. I would think this is not the last bank that will need a lifeline.
The dollar is slipping a bit vs. the bouncing euro today, and that is helping commodity prices. Oil prices are bouncing back near $97 and gold is trying to get above the $1600 level.
The 10-year yield is also seeing a bounce to the still low level of 1.90%. And the VIX is down a touch today to 19.81. Yesterday after reaching 2-month highs the VIX reversed lower and close right at 20.
Trading comment: Today is day 1 of the bounce and too early to make any calls about it. It would be nice for the bulls to see some volume pickup as the day progresses. The fact that the Nasdaq is lagging in early action is not a great sign, as that index has been a leader most of the year. But it is possible we will see some rotation. If the SPX can put together a multi-day bounce it should at least be able to get back to the underside of its overhead 50-day, which will now act as resistance near 1385. Most leading stocks remain in corrections/consolidation so investors' best bet is to either average in with small trades, or wait for a new base to build and then watch for a fresh breakout.
KAM Advisors has long positions in PCLN