I'm afraid to blow it again. Couple of times I called the end of this rally or at least a pullback and was dead wrong both times. But.
We see different reaction to the news now. Last quarter earnings were met with "buy, buy, buy" reaction, whether earnings were good or, more often, not so good. Now, earnings are coming better, I can actually see real growth in some reports, but every company gets killed. With exception of Google (GOOG), which reported outstanding quarter. I'm going to write more about Google later. But the fact that very good earnings from Intel (INTC), IBM (IBM) and Goldman Sachs (GS) were met with sell-off is telling.
Another point: sentiment is becoming more bullish now. If I understood Todd Harrison's last missive right, he's not bearish anymore. That's telling. Would be even better to see Doug Kass bullish, but I don't think so.
I thought that rally in July-September was a buying panic. Still think so. Looks like panic is over, window dressing finished in September. We are up for a pullback. How big is it going to be? Nobody knows.
Short term, I'm tempted to play earnings. I know it's a sucker's game, but temptation is too big. Medium term, I'm waiting for a 10% pullback. Because I'm bullish long term (defined as 18 months in my case), I'm buying such pullback and buying even more if pullback goes deeper. And of course, I want to take some profits.
Right now, I want to buy Intel. Jim Cramer is absolutely right: any company running 63% margin is a buy. Apple (AAPL) is tempting for a trade.
Full disclosure: at the time of publication author had a long position in GOOG and no positions in other stocks mentioned. Positions can change any time.