Traditionally for the last few years, I rake the rest of the autumn leaves in my yard in the weekend or two before Thanksgiving. Year-in, year-out, I have happy thoughts before I set out to do it. I think of all the times I raked leaves with my family. I think of how much my little girls love jumping in the leaves. I think of the cool crisp air with the breeze and sky foretelling eventual snow. All that stuff is great. What I don’t tend to truly focus upon is that last 1- 1 ½ hours of the task. This is the time when the kids are inside, the wind picks up a little more, my back is sore from raking and bagging 40 bags of leaves (when I expected it to be 10), and I wonder what could have made me ever want to rake leaves in the first place. The same type of malaise hit equities yesterday. Everyone was ready for Fed Chairman Bernanke to say positive things to the Senate Banking Committee yesterday in remembering the mild good things he has said these last few weeks. Instead, just as the 40 bags last year hurt, his comments about the economy facing “unusually uncertain” prospects spooked traders. Furthermore, he failed to offer any specific options he felt could stimulate lending and investment. Thus, if a pilot of a plane- who most passengers seem to have confidence in- suddenly tells you that the plane is encountering some turbulence, but is not quite sure how to deal with it, it’d make one nervous. This is what happened to stocks yesterday as investors sold off shares on worries about what is going on and what can be done to fix whatever problems there are because if the Fed Chairman cannot define it, who can? In the words of Joe Battipaglia, a market strategist at Stifel Nicolaus, "The market sold off because unfortunately there is no remedy provided in Bernanke's commentary to the rising threat of deflation, the excess capacity in the economy and the malfunctioning of the credit system." The surprise thrashed an otherwise bullish immediate-term environment. Bernanke will be grilled by the House today as he seems to be preparing the markets for a potential 2nd major qualitative easing program so keep your ears peeled for any additional comments or pointed answers to questions that Bernanke may make today.
Markets overseas were generally lower in Asia with Tokyo off 0.6%. Prices turned in Europe, however, on the heels of several strong reports on manufacturing activity with the bourses all up around 1% as of this writing. The dollar is relatively weak with gold and oil modestly higher. Futures have wiped out yesterday’s losses as of right now as well after the unexpected strength out of Europe as well as a number of positive earnings outlooks. Focus today on the biggest earnings morning of the quarter quantity-wise anyway with earnings out from a myriad of companies. Movement will be very choppy in this subset. Relative strength and weakness plays on the open will also be plentiful with the bounty of newsflow out there.
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
BIDU- great earnings
EBAY- good earnings
QCOM- good earnings
FFIV- great earnings
EW- good earnings
FNF- decent earnings
NTGR- decent earnings
XLNX- decent earnings
ETN- closed near a high after posting great earnings
CYT- closed near a high after posting great earnings
WFT- featured on “Mad Money” last night
LLY- decent earnings
BAX- decent earnings
DHR- decent earnings
ELN- decent earnings
FITB- decent earnings
NOK- decent earnings
TEL- decent earnings
XRX- decent earnings
UPS- great earnings
CBE- decent earnings
UNP- decent earnings
NYT- decent earnings
RCL- decent earnings
STJ- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
NFLX- terrible earnings
WDC- terrible earnings
SBUX- poor earnings
ISRG- terrible earnings
ADS- poor earnings
CA- poor earnings
SWI- awful earnings
DOX- poor earnings
ISIL- poor earnings
CMTL- closed near a low after announcing the loss of a major customer
AAPL- near island reversal after posting earnings
GS- closed near a low
MAN- near island reversal after posting earnings
RIMM- closed near a low
POT- closed near a low
EMAN- closed near a low
PNFP- closed near a multi-year low after posting terrible earnings
GCA- closed near a low after losing the renewal of a contract from Harrah’s
MLNX- poor earnings
MELA- FDA moving panel for MelaFind to November
DO- poor earnings
SHW- poor earnings
Earnings:
THURS. JUL. 22 BEFORE
ALK ALXN AN
APD BAX BBT
BMY BX CAL
CAT CBE CY
DHR DO ELN
ESI ESV FITB
FLIR HBAN HOT
HSY IDC JBLU
LH LLY LUV
MHS NOK NUE
NYT ORI PCP
PENN PLD PM
PNC RAI RCL
RS SHW SON
STI STJ SWY
T TEL TRV
UNP UPS USG
VFC XRX ZMH
THURS JUL. 22 AFTER
AMZN ATHN AXP
BCR BLUD BUCY
CAKE CB COF
CYMI DECK EQIX
FII FLEX HGSI
LEG MCRL MOS
MSFT NCR NFX
OSIP PMCS QLGC
RMBS RVBD SNDK
SPWRA SWKS
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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