This is one of those weeks that has the set-up to be dynamic…although it is every bit as likely that movements will not be exaggerated. But the signs are there. Today is likely to be a low volume day ahead of a bevy of news due out later this week. With that in mind, movement can rapidly become exacerbated based on dollar movement on the rumor du jour. Tomorrow will be Election Central. Usually when one of the legislative bodies change party control, both change. But this is likely to be one of those very rare years in which we could well have a Democratic-ruled executive branch and Senate with the Republicans controlling the House. This would result in the gridlock that markets so love however would not give the result that markets seem to be shooting for (i.e. a true split). On Wednesday, the FOMC is going to conclude a two-day meeting in which it’s widely expected to discuss quantitative easing guidelines. Thursday is the highest quantity day for earnings reports this quarter. On Friday, the latest jobs report will be issued which will only serve to serve as a backstop for the QE discussion. This is certainly a week to do tremendous research to be prepared by studying all news services and scouring entities like Intrade for odds of certain events happening all the while trading particularly selectively.
Tokyo was quiet overnight in falling 0.5% on the continued strong yen but Hong Kong rose sharply to the tune of 2.2% after a positive manufacturing report out of China. In Europe, prices are mixed with Frankfurt up 0.2% but London down 0.1%. The dollar is slightly stronger across the board with gold up almost 1% and oil up ½%. Personal Income and Personal Spending were both slightly weaker. ISM Index (54.0) and Construction Spending (-0.7%) are due out at 10AM. Futures are a bit higher. Off-hand, with it the start of the month and nobody sure what to do, look for a choppy relatively quiet/pensive session ahead of a potentially momentous week. Focus on small biotechs in the news such as AVNR, the mixed bag of big cap tech, fertilizers, earnings plays, M&A plays, and the small cap momentum plays from Friday.
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
CLF- closed near a high after posting earnings
GMO- closed near a high after posting earnings
CSTR- closed near a high after posting earnings
DECK- closed near a high after posting earnings
X- closed near a high
FRZ- closed near a high after the Department of Justice announced it won’t take action against the company
RITT- closed near a high
IBM- closed near a high
AGU, MOS- closed near their highs
STRA- closed near a high
GAGA- closed near its high upon debuting as an IPO
AVNR- received approval for Nuedexta
YRCW- Teamster freight members approved the restructuring plan for YRCW
SUR- received $22/share takeover bid from CAN
GILD- positive phase III clinical data re Viread as well as good results from Phase IIa studies of GS 9190 and GS9256
XCO- received $20.50/share buyout bid from its CEO
ACOR- good earnings
CTSH- decent earnings
JKS- great earnings
AAWW- good earnings
HUM- decent earnings
FTNT- rumored to have been approached by IBM about a possible takeover
Bad-The following stocks have bad news and/or a weak technical pattern
AAPL- closed near a low
AMZN- closed near a low
GS- closed near a low
OSTK- closed near a low after posting poor earnings
SNBC- closed near a low after posting poor earnings
NUVA- closed near a low after posting poor earnings
FSLR- closed near a low after posting poor earnings
HSIC- closed near a low after posting poor earnings
EXAS- closed near a low after one of the comppany’s drug’s results did not come out as well as expected
NR- closed near a low after posting poor earnings
IPXL- closed on a low
BIOD- poor complete response letter from the FDA regarding the company’s application for Linjeta
WL- to be bought out by MTB for .051372 shares of MTB
GLW- poor earnings
Earnings:
MON NOV 1 BEFORE
ACOR AGN BHI
CTSH ENDP GLW
HUM ICE JKS
L RE SPG
WL
MON NOV 1 AFTER
APC BKD FST
HK NTRI PFG
SANM VMC VVUS
WFR WMS
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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