Been very busy the last couple of days working on my quarterly letter. Hoping it will be complete by the end of the weekend.
We have not seen this type of buying panic since April. The shorts were obviously taken off guard and anything and everything was bought. Many traders were talking about the head and shoulders pattern and when that failed with supposed great visibility now into the third quarter because of Intel, it was off to the races.
Intel's numbers seem way overblown but I am not going to dissect them. The Market Ticker Blog did a good enough job for those who are interested.
So you have blow out Goldman numbers and blow out Intel numbers. Just the tip of the tip of earnings season but the other few companies who have reported have not reacted very strongly in the market. With Intel last night, Abbot Labs and Yum Brands both reported earnings. Both managed to finish down today!! Xilinx and Cintas both reported after the bell today. Both were down strongly (though admittedly after being up strongly) after the earnings release.
I would expect JP Morgan's earnings to be strong, though at this point I would think it would have to be priced in, but after that I am not sure we will continue to see the upside surprises. In otherwords I am not sure that Goldman and Intel are not just head fakes.
At this point, it very well may not matter since buying panic and under performance fears are back with every major technical level being slaughtered today. We may be back just to the mindless buying that has occurred for months.