It appears that we have a mixed bag of earnings this morning. For bulls, a mixed bag is good. The news flow needs to be positive enough to support economic recovery, but not so strong that it calls for the Fed to mop up liquidity.
ES futures are currently down –6.75. I mentioned on January 15th that I expected range bound price action and this up (yesterday) and down (morning futures) is expected.
I continue to follow the plan of picking my spots in a long only portfolio.
Today, China will be lower due to worries that the Chinese government will tighten lending. I added an initial position in PGJ at $25.05 yesterday and I plan on adding to that position at the 20 DMA today.
I also changed my mind on AIG this morning. Yesterday I sold my position. The stock bounced off support yesterday and I think it is worth buying at $28 with a stop at $27. AIG is in the process of working on a sale of their life insurance unit to Metlife. Marketwatch also indicates that AIG might spinoff American International Assurance Ltd. which could eventually produce up to $45 billion for taxpayers. Similar to Citigroup, I believe that ultimately investing with the government will be a winning bet.