IBM

by Larry Levin


As expected, the market went nearly silent after making new lows. Buyers came out to buy stocks on sale, which is becoming more like "regular price" than "on sale," when the S&P500 traded below Friday's late bottom. What is also normal is that once the market decided to rally - volume "shrank" like George Costanza when he jumped into the pool on that Seinfeld episode. Volume is an abysmal joke when the market is going up.

This morning's economic data was also normal: it was terrible. Bloomberg said this..."The National Association of Home Builders/Wells Fargo confidence index dropped to 14 this month, the lowest level since April 2009, from 16 in June, data from the Washington- based group showed today. Readings lower than 50 mean more respondents said conditions were poor."

Read that last sentence again. Not only was it worse than the low expectations, it was only 14; and a number below 50 is bad.

Get ready for your pockets to be picked again. Surely this data will lead the clowns in clown college (read: congress) to pass another porkulus bill: Home Builders Bailout 2.0!

After the cash market had closed, IBM revealed its earnings. Although its revenue rose 2%, IBM missed the analyst's guesstimates. More importantly, however, is that IBM generates more than 50% of its total revenues on services signings. IBM announced its second straight quarterly drop in services signings, with this quarter's decline of a sizable 12%.

Big Blue fell 4% on the news in after-hour trading.



Previous Day's Trading Room Results:

Trade Date: 7/19/10

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


1) No "Secrets" trades filled today.

2) Algorithm positions (13)

3) “Reading the Tape” positions (8) …combined Secret’s, Algo, & “Reading the Tape” total +1.50



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