YHOO and INTC have really taken a beating after hours. YHOO down 12% and INTC down 9%. In fact, we have a bit of a "perfect storm" for the bears this morning, with NYMEX $66.72 and NIKKEI down 2.9%.
Now before someone suggests I have had too much coffee, I do think the bulls have a problem. INTC is a Dow component and a bellweather stock. I am sure the chip sector (and more possibly the entire tech sector) will get rattled. Oil at 66.72 is another problem. I'm sure a great deal of it is down to short covering, but, I expected to see more profit taking yesterday at 65. Lastly, the suspension on the NIKKEI last night will not help. With the arb funds and hedge funds representing such a big part of the market we could see some pretty volatile conditions.
Clearly, during earnings season we do get quite a bit of volatility, that has to be expected. So far results have been poor. INTC's results and guidance were poor. We really need to see some pretty stellar results from the banks oils and retailers to compensate.
Things can change very rapidly. As someone who has an extremely short trading time frame, I am always reappraising my view on the market. I did that this morning. I am beginning to feel that the tide is turning. For the record, I am still looking to get long today but my expectations are much less ambitious than they were yesterday.
