Big Blue Takes Big Bite Out of Market
IBM played the opposite role of Netflix on Wednesday. Both companies reported after market closes and had hefty impacts on the subsequent trading days. The big difference was that the streaming giant led a rally higher on Tuesday, while Big Blue took a negative toll today that limited the upward push.
After two straight days of 200-point gains, the Dow couldn’t stay on the positive side as the index slipped 0.16% to 24,748.1. However, the other two major indices managed to remain in the green by a few points. The NASDAQ was up 0.19% to 7295.2 while the S&P rose 0.08% to 2708.6.
"Just a few days into earnings season it’s apparent that we’ve got a strong one here. About 10% of the S&P 500 has reported so far. Of those that have reported, 84.6% of them have beat estimates, with earnings coming in 27.9% year-over-year on revenues that are 10.7% higher," said Dave Bartosiak, editor of Surprise Trader and Momentum Trader. "As long as earnings continue to be strong I expect the market to eventually find a strong trend in the positive direction."
IBM’s quarter wasn’t disastrous by any means, but the market couldn’t get around its weaker-than-expected profit margin. The stock dipped more than 7.5% in the session. However, a good day for energy helped to mitigate the impact.
In the portfolios, TAZR Trader couldn’t pass up the opportunity to buy a semiconductor stock that dipped despite a strong quarterly performance. Blockchain Innovators got out of IBM for obvious reasons and swapped it with another name that’s been in the editor's sights for a while. Learn more below:
Today's Portfolio Highlights:
TAZR Trader: Shares of Lam Research (LRCX) got pounded today even though the semiconductor company announced another solid report, which included a strong guidance and positive surprises on the top and bottom lines. It doesn’t bother Kevin, who said yesterday he’d be a buyer at under $200. The editor feels the market is again convulsing over a “semi cycle top” that won’t happen, which therefore is opening an opportunity. He bought LRCX on Wednesday with a 7% allocation. Read a lot more on this move, including a look at what several firms are saying about this name.
Blockchain Innovators: Unfortunately, the “bottom blew out” of IBM on Wednesday, so Dave decided to rotate out of that name and into a new blockchain consultant. The portfolio added Accenture (ACN) today. Shares dipped to just north of its 200-day moving average a couple of weeks ago, but have been rising ever since. Now the editor feels that ACN should be able to break through overhead resistance at the 50-day, which is right around $156. Read the full write-up for more.
Counterstrike: "Quiet day for the most part as indices gapped higher and chopped around. This action is a trader’s nightmare as low volumes and low volatility take over a recently active market. Typically, traders will tend to overtrade on a day like today and get chewed up by the algos.
"Indices started much higher than where they finished as the recent momentum brought in buyers in the morning. But from there, all we saw was choppy action until the last hour.
"It’s a little too quiet out there. Let’s see if the market can finish strong into the weekend. I have a feeling the bears are going to make an attempt in the next day or two." --Jeremy Mullin in Counterstrike.
All the Best,
Jim Giaquinto
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