Yesterday, I made passing reference to three distinct events which bear watching. First, the Greek bond situation continues to worsen. As of this morning, the difference between the 10-year Greek bonds and the 10-year German bund is at its highest point since the crisis started despite what seem to be fruitless efforts by the Greek government to sell bonds to investors with the backing of the EU and IMF in the ready. Second, the Chinese economy had an enormous 11.9% rate of growth from a year earlier in the first quarter of 2010…but it actually did so with a slowdown in inflation. Their CPI rose less than was expected- only up 2.4% in March. Yet, the government announced measures such as investors being required to put down at least half of the value of a 2nd home to speculate in real estate as the Chinese housing market had a record increase in March. About 2/3 of the economists asked by Bloomberg news indicated they thought that interest rates would rise in China by June. Finally, there have been numerous clashes between the Thai army and anti-government protesters which have resulted in about 25 deaths thus far and are destroying economic growth of Thailand. There have been Thai security forces in place throughout Bangkok for a month which has resulted in once-in-a-generation violence. While none of these geopolitical and economic events have had any impact on world markets, they all bear watching as we head into a very busy earnings season at a perilous point for all three aforementioned situations. Don’t get me wrong: earnings should be the driver for the markets these next few weeks, but any of these extraneous events can add an exciting element of chaos to the mix.
Markets in Asia were down about 1.4% on average after the Chinese measures on real estate. In Europe, markets are straddling unchanged. Commodities are lower with oil and gold notably weaker. Futures are weaker on the GOOG news as well as some comments coming out of the GE conference call. Look for a downside bias all day today. The benchmarks will be GE, BAC, and GOOG. Focus on big cap tech, big cap financials, the microcaps, and relative strength/weakness plays.
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
BSX- resuming U.S. sales of key defibrillators
LGF- Carl Icahn boosted his bid for company and Mark Cuban purchased a stake as well
XNPT- received favorable patent ruling from European Patent Office
SIMO- good earnings guidance
CELM- mentioned positively in a newsletter
ATR- decent earnings guidance
IMGN- mentioned positively on “Mad Money” last night
CKEC- mentioned on “Fast Money” last night
BAC- good earnings
GE- good earnings
MAT- good earnings
PFWD- bought out by ORCL for 17
GCI- good earnings
Bad-The following stocks have bad news and/or a weak technical pattern
GOOG- good earnings, but the CEO bizarrely announced he would not be on the conference calls anymore
AMD- poor earnings guidance
MEE- closed near a low
IOC- near island reversal in closing near a low despite announcing a deal yesterday morning
X- closed near a low
ISRG- poor earnings data from conference call
PSUN- mentioned negatively on “Mad Money” last night
IMAX- traded down after-hours despite announcing press release about its showings of “Avatar”
NPSP- share offering
CBST- poor earnings
PBCT- poor earnings
VMI- poor earnings
CF- 11.23 million share offering priced at 89
Earnings:
FRI APR 16 BEFORE
BAC FHN GCI
GE GPC MAT
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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