Don’t worry. I won’t be graphic. I just have to describe something to make a point. It is all about childbirth. I’ve been lucky enough to witness much less play a part in the delivery of both of my beautiful little girls (Rayna and Samara). During the process, a zillion thoughts passed through my mind. But the pervading thought that I was left with was how everything was a blur leading up to their births. I remembered in a mental cacophony in my mind the discussions, the ‘could we handle it,’ the moments of pregnancy from when my wife and I told the world we were going to be parents to the moments when she had intense morning sickness. But all of that mental noise was eviscerated on the mornings of the angels’ births. All that mattered was that the kids and my wife were happy and, thank G-d, healthy. After sitting at my desk for a few minutes, could not think of a more applicable analogy for this stock market. On Tuesday, we heard headlines about China (some of us wrote a blog post yesterday about it), the pending foreclosure mess at the likes of Bank of America, and relatively poor earnings flow. But when I awoke yesterday morning, I noted that the dollar had fallen a full euro. By the end of the day, the loss was almost 2 ½ euros and the market had recouped for the most part Tuesday’s losses. Despite all of those Tuesday worries, the losses were wiped out yesterday because the dollar took a dive. ss has been noted in this space, when the dollar declines in recent months, it has been good for equities and vice versa. So, it is important as always to keep track of as much data as possible, but just as nothing mattered when my kids were born, nothing mattered to the markets net-net these last two days except for the performance of the greenback. Thus, that was the singular most important sign to show you where the market’s focus is right now and will likely be for some time to come.
Markets in Asia were lightly mixed overnight with Tokyo closing ostensibly flat but Hong Kong was up 0.4%. Markets in Europe have traded higher all morning to the tune of about ¾% on average as of this writing. The dollar leads the way again with it above 1.40 to the euro and below 81 to the yen. Gold and oil are slightly lower. Futures are higher on all of this but a bit off of their heights of the morning. LEI 0.3%) and Phily Fed (1.4) are both due out at 10AM. As has been so often the case recently, track the dollar to track the equities intra-day. Action will likely be choppy but maintain an upside bias. The focus is on the triple digit amount of companies that reported earnings this morning, the rare earth plays, and the big cap techs.
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
NFLX- great earnings
EBAY- great earnings
TSCO- good earnings
TSS- decent earnings
RHI- decent earnings
RJF- decent earnings
LNN- closed near a high after posting earnings
BA- closed near a high after posting earnings
WSCI- closed near a high after posting earnings
HUBG- closed near a high after posting earnings
URZ- closed near a high
GS- closed near a high
RIMM- closed near a high
UAL- closed near a high and had decent earnings
IL- featured on “Mad Money” last night
WSTL- decent earnings
NLST- demonstrated 100 virtual machines on a single standard server using Hypercloud Memory at Interop
ALXN- decent earnings
BAX- decent earnings
DO- decent earnings
STI- decent earnings
TRV- decent earnings
CAT- good earnings
FCX- great earnings
LUV- good earnings
MCD- good earnings
ISLN- good earnings
PNC- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
ADS- terrible earnings
STX- poor earnings
XLNX- poor earnings
TEX- poor earnings
MCP- closed near a low
FMBI- closed near a low after posting earnings
MLNX- poor earnings
HSY- bad earnings
PM- poor earnings
CYS- poor earnings
PM- poor earnings
PLCE- terrible earnings outlook
K- bad earnings
CRUS- terrible earnings
NTRS- poor earnings
FLIR- poor earnings
UNP- poor earnings
CY- poor earnings
ESI- poor earnings
Earnings:
THURS OCT 21 BEFORE
ALK ALXN APD
BAX BBT CAT
CRUS CY DHR
DO ESI ETR
FCX FLIR GR
HBAN HSY ISLN
JNS LH LLY
LUV MCD NTRS
NUE PCP PCX
PM PNC PPG
R RAI RS
STI T TRV
UAL UNP UPS
VFC XRX
THURS OCT 21 AFTER
ALB AMZN AXP
BCR BIDU
BUCY CA CB
CMG CPWR CTXS
CYMI CYT ELX
INFA MCRL NCR
PLCM PMCS QLGC
RMBS RVBD SNDK
SYNA WOOF
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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