The Market Takes a Punch

A few days back we asked if it could be so easy. The market had risen for nearly two weeks off the bottom of a brief correction in anticipation of a good earnings season. And in spite of that advance that we feared priced in the good news, on Wednesday it confirmed new highs off good reports from Intel (INTC) and JPMorgan Chase (JPM).

But two days of numerous less than stellar earnings reports have the market back on its heels. Today is especially ugly with the indices down significantly on higher volume as we near midday, an unwelcome sign of distribution.

But there is an important bullish indicator that should not be overlooked. It’s Google (GOOG).

We’re not advocating buying Google. But they posted a report that is impressive given the economic climate. And what’s most important is the stock, after a hefty advance, has gapped higher today, making repeated new intraday highs and doing it all on huge volume.

The market is taking it on the chin today. And it could well go lower. But generally speaking important stocks like GOOG don’t burst higher in a market that’s about to implode.

It might be difficult for traders that take an intermediate term long approach. But we still believe the key is to stay long the market. Google is telling you so.