Market Unforgiving if Expectations Are Unmet
By Rev Shark
Street.com Contributor
7/20/2007 2:46 PM EDT
The troops are putting together a pretty good bounce here, but they started a bit too early to give me confidence they can hold on into the close. We shall see, but I have to admit those dip buyers are looking pretty darn feisty.
Nonetheless, if you are looking to buy dips in some of your favorites, it is a good idea not to move too quickly. I'd work on identifying the names you want to buy and just stick your toe in while you wait for some basing action rather than a "V" type reversal.
... There is always an inclination on a day like today to conclude that the market has topped out, and it's going to be downhill from here. Perhaps it is the beginning of the end, but that doesn't mean we won't bounce around quite a bit. As I stated in my prior post, although the point loss is big today, we are simply back to where we were a week ago, and are still well above important support levels.
With the flood of earnings reports yet to come, it isn't particularly helpful to think of the market as a single monolithic beast. We are going to see some good reports and some bad ones.
However, we do know now after the reports we've seen so far that the market is not inclined to be forgiving if expectations are not met. There are some positive reactions to good reports, but it is certainly much more muted than what we saw in the first quarter.
My point is that during earnings season it tends to be more a stock-picker's market rather than a market-timing market. On any given day, you can have an ISRG up 46 points and a GOOG down 30.
So respect the market action, but don't be so negative that you overlook the possibility of some stocks that move big after they report.
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