Earnings this week GS and GOOG.. Recovery?
This past week has been quite the euphoric ride straight up on seemingly nothing but hot air spouted out of the mouths of the CNBC chatter heads. You gotta give it to them, CNBC that is, they have orchestrated a pretty good pump, their sentiment has done a complete 180 in the past month. It went from “How low can we go?” to “How high can we go?” “Is it too late to get in?” blah blah blah.. Anyway, all the BS does not even matter, what does matter is earnings. There are some big names reporting this week, the primary focus is Goldman Sachs and Google. Goldman is rumored http://adjix.com/kr3y, to smash earnings, SECOND highest profit in the company’s history. My opinion on trading this rumor is to play sentiment, if it looks like its gonna smash buy some calls, maybe 150 Mays. Denninger seems to be on the right track about Goldman and its hedging of the CDS’s over at AIG.
Over on the Google side of things, Erik over at http://adjix.com/m2sb has a hunch Google might be going to pull a fast one and blow out earnings. This is all based on his theory about Google walking back their earnings estimates in the weeks prior to reporting, causing the PPS of google to price in the new lowered earnings numbers, then bam they report and the stock pops!