Arguably the most important economic number of the month will come out today. It is the monthly “jobless report.” This report is released by the U.S. Department of Labor as a key cog in providing information about the condition of the domestic labor market. The key number is the change in on-farm payrolls which as the name implies is the number of jobs added or subtracted in the economy over a period of time. Farming jobs are not included because those numbers provide massive statistical distortions to the overall number due to the flow of people into and out of farming around harvest time (and shortly before and after). Today’s number has the potential to be a major influencer for markets worldwide (equity and otherwise). One school of thought thinks that a strong jobs number (i.e. improving job market) will be bad for the stock market because it implies that interest rates will go up which will stifle future growth. Another school of thought believe that a strong jobs report is bullish at this juncture for the stock market because the implication is that is organic growth and that a rising rate environment is actually a good thing right now due to positive aforementioned recovery. Nobody knows with certainty what the jobs report will be nor what the reaction will be. However, the performance of the stock market today will very likely give a clue as to what is to come much less make for a rather interesting morning for trading.
Markets in Asia were mixed with Hong Kong flat but Tokyo up 1%. In Europe, markets were flat before the unemployment number, but are now down about 1/3% on average. Oil is down ½%, gold flat, the dollar weaker, and equities down. It was not a good reaction to the numbers with stocks like AAPL down a full point as of this writing despite a positive mention on “Mad Money” last night. Prices appear slightly heavy after the jobs report came in weaker than expected with December revisions poor as well. Look for weakness out of the gate followed by an attempt to rally. If the attempt is weak, it ain’t gonna happen today. Don’t look for a major move either way with a lot of the movement to be early in the morning. Focus on relative strength plays and the tiny microcaps in the news.
Reiterating-
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 specified.
If 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
SCHN- decent earnings
CYCC- exploded in closing near a high after announcing that two different magazine articles noted the company’s phase 2b results were terrific for seliciclib (used to kill lung cancer cells)
OSIS, ICXT, IDN, ASEI, NICE- traded sharply higher after hours following a speech by President Obama regarding airline security
JOYG, BUCY- closed near their highs
ZEP- closed sharply higher after an upgrade
MBI- closed near a high
FPBI- closed near a high in making tremendous gains on the day
COHN- closed near a high
WYNN- closed near a high
VVUS- closed near a high after announcing positive phase II data on one of its drugs
SUTR- closed near a high after getting four new contracts
CMI- closed near a high
ULTA- closed near a high after posting good earnings
CITP- closed near a high after raising earnings guidance
DRWI- good earnings
AMT, SWKS, NDAQ- featured positively on “Mad Money” last night
KEI- decent earnings
AMT, CCI, SWKS, NDAQ- mentioned positively on “Mad Money” last night
CYTX- received approval from FDA for a device that is designed to use a patient’s own fat for cosmetic purposes
Bad-The following stocks have bad news and/or a weak technical pattern
APOL- beat earnings, but poor enrollment numbers and still trying to clear up some regulatory issues; CECO, COCO, ESI may move in sympathy
ANF- closed near a low after announcing terrible retail sales
BBBY- near island reversal after posting great earnings
SEED- closed near a low
GOOG, AMZN- closed near a low
GPN- poor earnings
TIN- closed near a low after receiving a downgrade
EJ- mentioned negatively on “Mad Money” last night
Earnings:
None today
Good luck today.
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
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