Bank earnings start today. The comments on the economic outlook will probably be watched more than earnings. If I had to pick a side, my strategies are bullish on bank stocks, as they have had a short term pullback into support levels. AAPL coming back from the dead Thursday in a big way helps the market. So Friday is likely another buy-the-dip day. Until some of these stocks have bigger corrections, longs are lower probability. That is simply the fact that historically after one of my set ups delivers 3 or 4 times in a row on the same stock it usually needs a bigger correction to reset everything.
Of course the market does not have to do anything. I am simply following the historical probabilities to guide me. If you are short term oriented and can move quickly in and out, I think a candidate for long scalps on calls Friday is IBM at 185. Chart attached. That level is about a dollar below Thursday close, reflecting that one absolutely cannot chase anything here. Buy the dip, expect higher prices if not Friday then next week. I am not comfortable with much of a size position but I might nibble small. Or I might not. But if I did, IBM is one of my picks.
Thanks,
Joe
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