Market Recap 10/27/13 and earnings season
This is the last earnings season this year, and the market is sitting high with lots of optimism in the air. The earnings have been stellar so far and some of the big names are already out and bidded high. AAPL is due next week and we shall see what this stock does.
The market is overbought and way above its moving averages. When the prices are so stretched out from moving averages they are always subject to a sudden downdrafts or pull backs to the downside or to the moving averages. Initiating long positions hence is risky and subject to the possibility of losses.
So what one should do? Try to wait a bit and see if this market pulls back, cause buying at the top is not the most pleasant thing after all. When the market pulls back to moving averages or some support levels than its time to enter longs safely.
Some of the big names are already pulling back to the moving averages like LNKD and NFLX and there is some topping action on GOOG chart as well. This will present a good opportunity for long positions shortly.
The earnings season is in full swing and one should know earnings dates before entry of any trades. If you have a position, you need to either get out or trim some before the earnings that is the golden rule.