No Volatility Again

by Larry Levin

The Goldman Sachs volatility has ended as abruptly as it began. After ONE day of much needed volatility it vanished like a puff of cigar smoke in the wind: GONE.

Although the S&P500 had a small range of just 8.75 points, it was even worse than appears. The market actually traded in two well defined but ridiculously small ranges. The first range traded all morning and was only 5.00 points wide. After a small range extension higher, the market settled into an even smaller afternoon range of just 4.75 points...for HOURS.

Apparently the market was waiting for the afternoon earnings reports of Yahoo and Apple.

Yahoo's first-quarter net revenue came in at $1.13 billion, lighter than the $1.17 billion in sales estimated by analysts. Although the company's profit nearly tripled to $310 million from $118 million, its shares were down 4% in the aftermarket.

As usual, AAPL crushed earnings expectations driving its stock price up 8% in the aftermarket. The company's report of a second-quarter profit of $3.07 billion, or $3.33 a share, up from $1.62 billion, or $1.79 a share, a year ago drove the share price. Revenue leapt 49% to $13.5 billion. Analysts polled by Thomson Reuters had expected $2.45 a share in earnings on revenue of $12 billion.

The question now is - will the earnings drive share prices even higher (on a daily basis of course) or do good earnings simply justify the one-way ramp higher? What then?



Previous Day's Trading Room Results:

Trade Date: 4/20/10

E-Mini S&P Trades*
(before fees and commissions):

1) B/away buy @ 8:31am at 1201.25 = +.50, +.75, -1.00 (3 lots)

2) FT buy @ 1:08pm at 1202.00 = +.25 & +1.50 (2 lots)

3) Algorithm positions (9)

4) "Reading the Tape" positions (6) ...combined Secret's, Algo, & "Reading the Tape" total...+.75



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