I am an optimist at heart. I have also been very bullish regarding the stock market for quite some time now. Thus, it pains me to spend even a few minutes typing out something negative which I voiced on Friday’s video but I am gonna have to as all I can do is call it as I see it. Simply put, I absolutely don’t like the way the market acted last week. When an army is led into a war, the soldier relies on their generals. When a bull market goes to continue being good, it particularly relies on its leaders. The major tech leader for two years has been AAPL while the major financial leader has been GS. Few realize (I know I did not until I studied it) that AAPL is down 10% plus from its high in definitive corrective mode in closing at its lowest point in a month on Friday. GS is actually down almost 10% for the year in closing at its lowest point in a month as well on Friday. Thus, what has been propping the market up has been things like mining stocks (gold and silver closed at new highs on Friday) with cyclicals like PG closing at their highest point in a month on Friday. Furthermore, the VIX closed at its low for the year while bond prices had their biggest rally last week of the entire year. It’s also worth noting that very quietly, Ireland’s debt was downgraded two notches with Greek bond spreads exploding. All of this spells trouble. It’s very uncomfortable when you look to your leaders and they’ve taken off already while you look around and see your enemies gaining ground. Am I saying the market is in imminent danger of collapse? No. But I am saying for day traders that I fully expect a pick-up in volatility and news flow imminently and that the market is likely on the verge of a fairly major move. If these factors reverse themselves (Greece settles down, AAPL/GS begin performing better, and so forth), the move will be the other way. Regardless, there is tremendous pressure building underneath the surface and I am more on guard for something than I’ve been in quite some time.
Markets in Asia were lower with Tokyo down 0.4% and Hong Kong off 0.7%. Markets are even weaker in Europe as Frankfurt and London are both down 0.9% and Paris 1.4%. Gold and oil are weaker with the dollar a bit stronger against the euro. There’s a lot of news. Saudi Arabia indicated the world had too much oil. China raised a key interest rate. Citicorp
announced decent earnings. Greek defaults continued to widen. A lot going on. The NAHB Housing Market Index (17) is due out at 10AM. Look for a choppy session with more volatility than recently in what will be the slowest day of the week in all likelihood. The focus will likely be on the earnings plays, biotechs in the news, metals, and relative strength plays.
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
HOGS- closed near a high after signing an agreement with China Construction Bank
IEC- closed near a high after issuing positive earnings guidance
ATI- closed near a high
MEE- closed near a high
MNTA- closed near a high
LLEN- closed near a high
ACOR- closed near a high after a USPTO posting suggested new IP could be issued in coming months
TITN- good earnings
HAL- decent earnings
LLY- decent earnings
AMRN- phase III Anchor trial met all primary and secondary efficacy endpoints
RIMM- positive article in “Barron’s”
GWW- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
ALTI- contract with INE cancelled due to regulatory issues
ZOOG- poor earnings
YOKU- closed near a low
AAPL- closed near a low
FSLR- closed near a low
RIG- closed near a low
HOLI- closed near a low
CF- closed near a low
GOOG- closed near a low after issuing terrible earnings
CYH- indicated the U.S. government is probing improper claims
Earnings:
MON APR 18 BEFORE
AMLN AMTD C
GCI GWW HAL
KEY LLY MMR
MON APR 18 AFTER
CR LNCR MOH
PKG TER TXN
ZION
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