Courtesy of Dave’s Fry’s ETF Digest, July 15, 2009
As was stated last night after Intel reported earnings, stocks were taking off in after hours trading across the board. Today we got a major rally but still on below average volume. Volume shouldn’t matter this much given the summer season but supposed green shoots are being used by the Street to trade markets their way. The ongoing “better than expected” mantra is getting annoying. Intel’s earnings were in that category. The important thing fundamentally seems how the media and the Street are spinning earnings and PEs. The “stocks are cheap” based on low PEs is gained by using “operating earnings” (which excludes various losses and one-time charges) vs GAAP (Generally Accepted Accounting Principles) which if used would put PEs at super high levels. (Don’t you wish you could do this with your company or personal earnings?) The tape is the reality we must accept but there’s a lot of bullish BS floating about, but it’s real BS if that makes any sense.
So we were off to the races early with a large gap opening higher and a steady ramp throughout the day.
Volume was below average but perhaps this is the new normal. Breadth was probably running at a 90/10 positive rate.
Here are a couple of Dave’s charts for the S&P 500.
[For all of Dave’s charts, go here >>]
