Since bouncing off from January's pullback, this rally has run for more than 2 months straight, from early February until now. Even as commodity sectors saw profit-taking, the broader market managed to close in the green today. Techs stayed strong with INTC adding another +2.98%. Financials also saw gainers here and there. Perhaps investors were still expecting good earnings from GOOG and BAC. Perhaps they were correct to anticipate good earnings. But, whether or not the reaction will be positive is another question.
After the market, GOOG did report better-than-expected earnings showing 1Q profit rise +37%. However, its shares fell 4.89% in after-hours trading. ISRG blew away its earnings estimates, delivering a profit of $2.12 per share vs. a concensus of $1.68 per share. Its revenue jumped +74% from a year ago! ISRG shares initially rose above $400 from a closing price of $388.01. But, it soon reversed course and traded down $8 this evening. AMD also delivered a solid earnings report, beating the estimates. Nevertheless, its shares went down 4.82% after the announcement.
This rally has already been going quite far without seeing much of a pullback. It pushed even higher this week with INTC and JPM's earnings. How much further can the market rise without seeing some meaningful profit-taking? Bulls may have been holding their breathe a little too long this time. Perhaps it's time to let out some steam? What we saw this evening with investors cashing out on solid earnings reports could be a sign that the market is ready for a pullback.
SPX is presently sitting at 1211.67, 11 points above the 1200 level. Nasdaq closed at 2515.69, 15 points above the 2500 level. The Dow is at 11,114.57, 114 points above the 11,000 level. At the very least, we should see these key levels tested soon. Although the earnings season has really just started and most analysts are expecting solid reports, we'll have to maneuver carefully over the next couple of weeks. It'll be very interesting to see how investors react to BAC's earnings. Given tomorrow is Friday, I would not be surprised to see more profit-taking.
Good night and HappyTrading! ™
Disclosure: no positions