Biggest Point Drop in 2012, AA Earnings Surprise Beat
Markets were flat at the opening today but dove lower throughout the day. The markets have closed down 5 days straight dropping 60 straight S&P points. That is a 4.2% decline in 5 days. Even the Jesus Stock (AAPL) was down today....oh the humanity!?!?.....as @creditspread23 put it today when referring to today's overall market action.
Alcoa ()surprised to the upside with earnings of $0.10/share versus estimates of -$0.04/share loss after the closing bell. The $0.10/share gain is down from a year ago of $0.28/share. But, the surprise profit was a big beat compared to the consensus expectation of a loss.
We don't think AA alone will be enough to turn the market on a dime tomorrow. However, an earnings upside surprise should definitely help stabilize things as the market is getting pretty oversold. The recent pullback has been quick and dirty. Technical damage has been done to the charts but a quick reversal to regain S&P 1370 would mostly negate the pullback and classify it as a shakeout; we are not calling for said reversal necessarily, just providing analysis, extrapolation, voodoo, or whatever you would like to label it.
Our Monthly Trading Service put positions are still comfortably OTM, despite today's large drop, but further weakness will definitely cause us to jettison the puts to keep any losses small and manageable. We will actively monitor our positions, as always, and release Trade Alerts in a timely fashion if required.
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