Tag Archives: Yahoo! Inc.

Macro vs. Micro

Playing this market recently has come down to two problems: debt (macro) vs. earnings (micro). On the earnings front, you’ve a lot to follow, even in a down market. Finding strong cash flow, strong balance sheets, small/mid/large cap hasn’t been so difficult. The issue is unemployment and the ongoing macro problems keeping a lid on the continued release of positive earnings.

If you read this blog you’ll know that I’m distracted by technology stocks.

Any good news on the debt (macro) front is going to boost this market. That’s the prevailing sense and logically, good news should boost the market. We’ve waited so long now that the pop will be a good one. The truth is good news could come from either the US or Europe. That news doesn’t even need to be ‘super good’, just ‘decent’. Whether it is valid/real or not is another discussion… It probably won’t be, but that’s for traders with a longer term vision than mine.┬áThe reality is that the US will have an easier time releasing decent news and sooner (or later) the Republicans will get off their high horse. I’m embarrassed with that debate. But again it’ll be ‘easier’ for the US to lead the markets here. The EU is turning in circles and it’s the summer… Here’s a good graphic explaining the risk of banking and trade contagion. (The Washington Post)

So what should you trade in this market? Fundamentally, any good news will have a stronger positive effect than normal. Earning plays are working very well now. I’d watch option volumes closely before earnings and play long straddles. WYNN was hot today and is a good example. GOOG was another last week. Three stocks that release tomorrow after the close: AAPL, VMW, and YHOO would be good ones to consider. YHOO though is seeing lots of short interest. Be careful. The run up in AAPL today gives you an idea of expectations. I’m staying away from Financials which are being strongly effected by the worldwide macro worries but playing SLV and GLD in response.