Are the bears out of hibernation?

Below is a PDF with the NHF weekly.  Click on it for the 2 page report.

NHF Weekly 1-24-10

This earnings season isn’t working out to well for the market and the big question is if this is going to turn into something more.  Obviously the markets have been very overbought and the VIX is extremely low long term as our post noted last week.  Today the market confirmed the downtrend that we have been watching and is now at a support level at $112.50 and the 50 day moving average around $111.75.  We are going to keep an eye on this support going into the close today and will let you know if we do make a rotation to short.  Below are a couple charts for info.

This report is the latest release from the Office of the Comptroller of the Currency and Office of Thrift Supervision on the mortgage industry and the stats on the performance.  It is a great report that comes out quarterly that lays out all the details of the mortgages out there.  A lot of great data tables and charts that show the current performance of mortgages and also the performance of the home retention actions.  Below is an excerpt from the executive summary:……

The joy of earnings season.

Below is a PDF with the NHF weekly.  Click on it for the 2 page report.

Below is the earnings chart for Intel.  It shows the history of Intels earnings and upcoming expections with the stocks performance during the same period.  As you can see in the  chart below the earnings difference year over year for the upcoming earnings Thursday could be potentially huge if they meet expectations. The earnings outlook will be very interesting and important for the streets reaction as well.  The street expects $0.45 tomorrow evening. (Go to full post for the big chart)

There is an old saying on Wall Street that when the VIX is high you buy and when its low you go.  For those unfamiliar with the VIX index it is the ticker symbol for the Chicago Board Options Exchange Volatility Index, a popular measure of the implied volatility of S&P 500 index options. A high value corresponds to a more volatile market and therefore more costly options, which can be used to defray risk from this volatility by selling options. Often referred to as the fear index, it represents one measure of the market’s expectation of volatility over the next 30 day period.  So basically when fear is rampant in the market the VIX is high and when its an endless summer on Wall Street the VIX is low.  More definition at Wikipedia:  VIX link

Below (on full post) is a chart that shows the VIX over a 4 year period.  As you can imagine the VIX has been steadily declining since the market rally began last March.  The interesting point is that the VIX has gotten so low that it is approaching the low levels pre crash in 2007 and 2008.  So will the old saying hold true?  Now that the VIX is getting low is it time to go?

Alcoa kicks off earnings tonight.  Obviously the industry that Alcoa falls into has been red hot as of late with the falling dollar.  It will be interesting to see what the numbers look like.  Below is a chart showing the earnings expectations and the past earnings of the last year or so with a back lay of the stocks chart.  The year over year comparison of Q4 earnings has the potential to spark a rally based on validation of Alcoa turning the corner from the depths of last March.  2008 Q4 earnings  -$0.28 and the expectations for 2009 Q4 is $0.05, which is quite a difference and even more so for next quarter if they set positive outlooks.