There are lots of things that we know will continue for an “extended period.” The NCAA tournament will take place for an “extended period.” The weather will hopefully be fairly nice throughout much of the United States for an “extended period.” Bears tend to hibernate for an “extended period” each year. There will be worries about geopolitics and terrorism for an “extended period.” In some of these cases, we have a general timeframe as to exactly how long the event will last. We know the NCAA tournament will be over in 2 ½ weeks. In some cases, we have a loose idea; we know approximately how long bears will hibernate in a given locale. In some cases, we have no idea what an “extended period” of time is as with the geopolitical example. Well, that last example seems to be where we are with the Fed and its “extended rate” policy. For those not aware, Federal Reserve officials repeated their pledge to keep the main interest rate near zero for an “extended period” of time. What this means is that because interest rates have remained so low, there has been a wall of liquidity which has created an inherently rising risky asset bias. If the average investor can only attain 1%-2% of interest in a short-term savings account on a million dollar deposit, it inherently causes people to seek higher rates of return elsewhere. Thus, by not even gently hinting to the world as to when interest rate policy will change, the inherent belief is that it will not be soon. Well, this is a very pricey game of guesswork because it directly impacts markets- and again, it largely explains the reasoning behind the ever-rising global stock markets. Thus, while we don’t need to know every nuance out there, every trader must know and understand the wording of the Fed statements as well as the meaning of what they don’t say.
Markets overseas were higher overnight with Tokyo up 0.8%. Hong Kong 0.2$, London 0.7% and Germany 0.3%. Commodities are down a bit with the euro again weak. Futures are marginally lower. There are a lot of clouds on the horizon with post-expiration weeks usually countertrend weeks, the Greek situation getting stormy anew, and healthcare legislation poised for a weekend vote. But the broader tape continues to shake everything off. Look for another quiet day with a modest downside bias. Almost all trading will likely be done at the beginning and end of the day with the middle dominated by Spring Sunshine and March Madness.
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
SOMX- FDA approved Silenor for treatment of insomnia
FDX- closed near a high after posting earnings
MDTH- closed near a high after an upgrade from Deustche Bank
PANL- closed near a high after posting great earnings
CHBT- closed near a high
BGC- closed near a high after changing its accounting methodology which caused the company to raise first quarter earnings guidance
WLP, UNH- closed near highs
POL- good earnings guidance
DIN- closed near a high after a brokerage upgrade
WNC- closed near a high
CTEL- CEO featured on “Mad Money” last night
BIDU- “China Business News” reported GOOG will close its businesses in China in April
Bad-The following stocks have bad news and/or a weak technical pattern
TSL- closed near a low after announcing a share offering
X- closed near a low
MDVN- closed near a new trend low
PALM- abominable earnings
SPWRA- poor earnings and announced accounting restatement
CTAS- lukewarm earnings
NLST- share offering
ADUS- terrible earnings
CXO- closed near a low
BALT, CRU- mentioned on “Sell Block” of “Mad Money” last night,
TSL- 7.9 million share offering price at 20.25
APPA- received FDA complete response letter for APF 530 in which FDA express concerns about APPA’s two-syringe administrative system
GOOG- “China Business News” reported GOOG will close its businesses in China in April
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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