The thing I heard the most around the ol’ trading house yesterday was “is it going to be this slow all week?” The answer is a definitive “no.” Assuming there is no extraneous event, it is going to get slower this week. Good Friday week in particular is always a tricky calendar time in which to trade- day trade in particular. It is dependent upon the lunar calendar, but typically, Passover tends to start during Good Friday week (this year, Wednesday night at sundown). Just as the markets are closed on Friday, many people take off for the first day or two of Passover (much les the whole week thereafter). Also, a lot of traders take off to celebrate Easter with their families. The litany continues. It is ‘spring break’ week in most New Jersey schools this week with New York schools to be closed Thursday, Friday, and all of next week. But it gets better. As many people take off during this time, much of corporate America does as well. Earnings season technically starts today with Alcoa (AA) leading off the earnings parade and there are a handful of fairly big companies reporting next week (many of the big financials such as GS, GE, and C are due to report next week). Yet, next Monday (the first business day after Good Friday) is the slowest earnings day of the quarter and usually one of the slowest trading days of the year for that matter. The net of all of this is this: the next four trading days in particular will be progressively slower (likely denoted in smaller than normal watch lists). Next week’s trade will be busier but illiquid due to a relative paucity of trades yet there will be some news flow. Thus, do not overtrade these next few days and save your powder for the earnings season to come…with next week being the start of the action albeit busy pockets with quiet trade during the middle of the days.
Overnight, markets in Asia were down about 1/3% on average with markets in Europe declining heavier to the tune of 1% to 2% across the board. The dollar and oil are also down. And completing the fun- futures are pointing to a sharply lower open. There is no major news out there except for reports out of Detroit regarding the ever-increasing likelihood that GM is preparing for bankruptcy. With the relative dearth of news-flow, don’t look for extreme movements today with downside action likely. As has so often been the case, again note that the corollary here is that if the financials shake off renewed weakness, you’ll see a turn rapidly as shorts rush to cover…but with the techs down with the financials this morning, it just doesn’t seem likely
Watch list:
04072009Eriklist.zip
Reiterating-
Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea.
If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-
Good- The following stocks have good news and/or a strong technical pattern
BLUD- good earnings
LMT, NOC, RTN, BA- among the very strong defense stocks yesterday on comments from Defense Secretary Gates about the government’s budget plans for the next 12-18 months
RIMM, AAPL- among the strongest of the big cap techs in a weak overall tech market yesterday
FMD- the strongest of some small financials which closed near a high
CZZ- huge recent run-up; closed near intra-day high
KAMN- broke to new intermediate-term high
SPIL- mentioned on “Mad Money” positively last night
Bad-The following stocks have bad news and/or a weak technical pattern
VTR- issued in-line guidance for 2009, but also offering 8.5 million shares and doing a notes offering as well
CHTT- beat quarterly estimates and raised guidance on underlying earnings, but missed on revenue guidance
Earnings:
TUES APR 7 BEFORE
CHTT
TUES APR 7 AFTER
AA BBBY MOS
RECN RT
Good luck today.
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
FAIR VALUE = -275 BUY PROG = -175 SELL PROG = -375
ReplyDeleteCASHIN'S COMMENTS
MONDAY, APRIL 6, 2009
[AN ENCORE PRESENTATION]
On this day in 1808, a German emigrant who had come to America twenty-four years earlier founded a new company. There was nothing remarkable about that, other immigrants were founding companies. And there was nothing remarkable about the name of the company. It was "The American Fur Company."
But the Founder's name became remarkable. It was John Jacob Astor. And, when he died some forty years later, he was the wealthiest man in the new and vibrant America.
Conventional history tells us the wealth was the result of shrewd trading, business opportunities, and a knack for monopolistic combinations. A less conventional theory (that has somehow lasted nearly two centuries) holds that Astor's success was the result of a lucky land purchase.
That theory maintains that Astor got quite lucky when he began building on a piece of property owned by a former Manhattan businessman. The earlier Gothamite was a guy named William Kidd or Captain Kidd as he became known. And cynics think that Astor's fortune may not have been based solely on savvy business acumen; rather it could have been the result of finding more than a few trinkets in a chest or two on the property?
To celebrate, explain to someone on the next barstool that wealth in America, despite the fears of some is based on hard work and perception. But talk fast. After Happy Hour the price per drink goes up by two doubloons.
The markets didn’t exactly find a treasure chest on Friday but the bulls did enrich their case just a bit.
Stocks Spend Much Of Day In Mild Negative Territory. In Final Thirty Minutes Invisible Hand Helps Them Close Above 8000 – Stocks traded in a relatively narrow range throughout the day Friday. Most of the day was spent on the downside after a couple of pieces of morning data disappointed.
Non-farm payrolls saw the headline number as a touch better than expected. Pre-opening futures popped on the headline but rolled over as revisions cut over 80,000 more jobs for previous numbers. The bulls tried to shrug off the revisions and did mange to get stocks into minor plus territory for a few brief minutes after the opening. Then they went into “sulk mode” into late afternoon.
Around 2:30, Chairman Bernanke suggested that the Fed’s rescue programs might be seeing some results. That provided a mild spike to the financials and the REIT group. When Mr. B. left the microphone, the buyers left the stadium. In the final half hour, stocks miraculously floated up to allow the Dow to close above 8000. Just a lucky coincidence I guess.
The Week Ahead – Based upon published data, the watercooler wizards are guessing that this week’s calendar may look something like this:
Monday: China, Thailand, Vietnam & Manila Closed
(10:00) Employment Trends
(12:00) Chicago Fed Index
(1:00) Fed Gov. Warsh Speaks
Tuesday: BOJ Opines
Aussie CB Opines
Earnings Season Begins
Chain Store Surveys
(1:00) Ten Year TIPs Auction
(3:00) Consumer Credit -$3.5B
(5:00) ABC/Washington Post Conf. Index
Wednesday: SEC on Uptick Rule
Thailand CB Opines
(7:00) Mtge Apps
(10:00) Wholesale Invent. -0.6%
(10:30) Crude Inventories N.A.
(1:00) Three Year Auction
(2:00) FOMC Minutes
Cashin’s Comments
Monday, April 6, 2009
Page 2
Thursday: Bank of Korea Opines
BOE Opines
Chain Store Sales
(8:30) Initial Claims +6K
Import Prices 0.9%
Trade Deficit -$36.B
(10:30) Natural Gas Invent. N.A.
(12:00) Larry Summers
(12:15) Minneapolis Fed’s Stern
(1:00) Kansas City Hoenig
Ten Year Auction
(2:00) Bond Markets Close
(4:30) All the M’s
Good Friday: U.S. Markets Closed
As you can see it is not a particularly heavy calendar. Several central banks will be opining on rates but no major surprises are expected. What could move markets is the progress of earnings season. Another factor may be how bonds react to the Treasury auctions.
This earnings season may provide many surprises. As the financial markets became rapidly unglued in the wake of the disastrous error of letting Lehman go under, many, maybe most companies stopped giving guidance on future results. That suggests that many results may surprise “unguided” earnings estimates.
Gone But Not Forgotten – Our ham radio pal passed along the latest sunspot data on Friday. Perhaps we should say he passed along the latest non-sunspot data. The numbers for March 26th through April 1st were: 0, 0, 0, 0, 0, 0, 0. Thanks to our previous exercise, you may have already guessed that averages out to zero.
NASA put out a special report on April 1st, citing the unusual and noticeable recent dormancy of the sun. The NASA report notes that for 2008 there were no sunspots sighted on 266 of the year's 366 (Leap Year) days. That's 73% of the time with no spots. This year nearly 90% of the dates have been spotless. It also discusses changes in the solar wind, the sun's brightness and other hints of a sleeping sun – and how it may impact earth. It is a very interesting report and worth going on-line for. The title is "Deep Solar Minimum."
Cocktail Napkin Charting – Thursday's rally had stopped at the upper boundary of nearby resistance (S&P 845). Friday's closing levitation came near that level but came up just short.
The napkins will stick with 845/848 as nearby resistance. Going through that could look to 858/862. On the support side, napkins hint 825/830 and then 805/810.
Consensus – At dawn, futures are mildly better, based, we think, on a sigh of relief that the HSBC rights offering was completed. We had projected that the rally might start to consolidate by moving choppily sideways. We still think that's the most likely course. There are also hints that several cycles are converging around tax day, April 15th. Haven't been able to sort out the direction yet. Stay very, very nimble.
Trivia Corner
Answer to "She loves me; she loves me not!" - The anagrammed flowers were: Aster; B) Peony; C) Pansy; D) Rose; E) Daisy.
Today's Question - An old Sr. Partner decided to really test a hotshot job applicant. He said - "My son is 24 years younger than I am. My grandson is 25 years younger than my son. My age plus my grandson's age equals 73 years. If you want the job tell me how old I am." Well??
Seasonal Bonus Question - A seasonal repeat - Who or what determines when Easter falls each year? (Hint: It is based on Passover so you get bonus points for answering both.)