Fri. NOV. 12- Irish Eyes Are Not Smiling These Days

Imagine if after the market’s huge rally of the last 1 ½ years, Citicorp was trading around 2 while Bank of America (BAC) hovered just below 1. Not fathomable after the QE pumping? Such is the case in the Emerald Isle. My mother was just in Ireland and regaled me with descriptions of the beauty of the area, the niceness of the people, the geniality of restaurants…and the emptiness of many of the establishments of the merchants. As of yesterday, shares of Allied Irish Bank (AIB) were trading at 95 cents with Bank of Ireland (IRE) hovering at 2.20. In the interim, bond spreads between Irish debt and that of places like Germany have quietly widened to levels precariously higher than they were during the European debt crisis which took during the summer. The latest crisis seemed to coincide with a statement by Irish Prime Minister Brian Cowen in mid-October in which he indicated that Ireland would need to increase its planned budget savings from 2011-14 which is fancy talk for budget cuts. Then, Germany proposed a sovereign debt restructuring schematic to take place after 2013, but Irish bond investors grew worried about pushing out problems. Later, the Irish government projected that it debt will actually be more than 100% of GDP in 2012! Thus, investors have already priced in debt downgrade ratings and it appears likely that Irish debt holders will face a restructuring of said debt. A lot of the losses will be absorbed by the real estate-loving AIB which may eventually be take non by the Irish government- a de facto nationalization of a bank that may never lend money again. With growth prospects worsening and the real estate market weakening as well, it appears to be a fairly glum situation for Ireland. I cannot begin to guess as to what will happen nor do I know if the debt woes of Ireland will be contained. But the story has been given very short shrift by the mainstream media and it is a situation that could have major implications for the euro much less the world’s stock markets over time.

Well, the focus is not on Ireland right now as there's a more imminent issue. Markets overnight were pummeled throughout Asia on some very obstinate wording from key Chinese politicians and members of their Central Bank indicating immediate-term changes coming to Chinese monetary policy. Taken in combination with the G-20 meeting in South Korea this weekend, it sent shivers throughout Asia with Tokyo down 1.4%, Hong Kong down 1.9%, and the Chinese stock market off more than 5%. In Europe, the movement is much more moderate with London and Frankfurt both down about 0.3%. Bonds are getting hit to the tune of about 5 basis points with the dollar weaker. But commodities are getting smacked with gold down 1% and oil 2%. Futures state-side are down as well. Look for more volatility than in recent times today with commodities prices and rumors of G-20 rumblings moving stock prices. The focus will likely be on the various biotechs in the news (such as HGSI), the earnings plays, the commodity plays, and any relative strength from recent small cap momentum plays (such as AUMN).

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

AREX- closed near a high after a successful common stock offering at 16.25

SLXP- closed near a high

MOS, CF- closed near a high

BIDU- closed near a high

NVDA- decent earnings

SPWRA- decent earnings

MSCC- decent earnings

FNSR- great earnings guidance

OINK- good earnings

AUMN- closed near a high

GOK- closed near a high

LNG- closed near a high after a subsidiary signed a deal with ENN Energy

BEXP- closed near a high

HGSI- closed near a high on vague takeover rumors

TTEK- closed near a high after issuing earnings

MMYT- closed near a high

NG, EGO, AUY, CTEL- featured on “Mad Money” last night

CPIX- good earnings

BSQR- decent earnings

A- decent earnings


Bad-The following stocks have bad news and/or a weak technical pattern

SRDX- closed near a low after issuing earnings

TORM- terrible earnings

DVOX- poor earnings

CELM- poor earnings

CMT- closed near a low after issuing earnings

MELA- closed near a low

WEN- poor earnings

HGSI- FDA posted review of Benlysta ahead of panel meeting


Earnings:

FRI NOV 12 BEFORE

A DHI JCP

STRI WEN




Epiphany Trading, LLC
www.epiphanytrading.com

Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President