TUES. NOV. 30- The Bailout

Imagine if you will somebody who is in their mid 50's to mid 60's age-wise. This person has been very well-off for a number of years in running a series of businesses in a mid to larger-size town- probably the 2nd or 3rd wealthiest person in the town. Stable. Not flashy. Brings money home and supports his or her family, extended family, and is a major benefactor for several charities in addition to providing a few hundred jobs in the local economy. However, over the last 10 or 15 years, the person has acquired four planes, a yacht, moved into a mansion, and purchased seven cars- all while providing funding for the charities (which has increased) and running businesses (and trying to expand them in building things like new factories) which power the town's economy. In the interim, several large investors are providing the financial means for this local business person to operate his companies much less run his personal life. Suddenly, things turn for the worse. With the overleveraging, the person now disrupts not only his own personal world, but the lives of many other people. Should the business person be bailed out along with the people he affected so that the town will not crumble economically? Well, in Ireland right now, not only did the Irish get a near $100 billion bailout over the weekend, the actual investors of the debt are not going to have to eat all of their losses. It's not for me to be the moral authority on such issues nor to pontificate as to what the solution is in this space, but I do try to understand what's going on. In the immediate-term, this should provide some immediate-term stability in Europe. But yields on Irish, Spanish, and Portuguese debt skyrocketed the last few days in indicating the problems there are quite serious. So, as the next few months progress, it is going to be crucial to monitor the debt situation there to see if the euro can hold from the moral hazard measures being taken by all of Europe as well as the potential implications the whole mess could have our on the domestic stock market.

Markets in Asia were down overnight with Hong Kong off 0.7% and Tokyo 1.9% amid Korean Peninsula worries as well as fears of more interest rate hikes in China. Stocks were mixed in Europe after yesterday’s hefty downdraft with London and Paris both off about 0.3%, but Frankfurt holding positive ground if barely. The dollar continues to rally against the euro with 1.30 being challenged now, with gold up 0.5% but oil down slightly. The Case-Shiller 20-city Index is out at 9AM (1.0%), Chicago PMI (59.8) at 9:45AM, and Consumer Confidence at 10AM (52.0). Futures are getting hid very hard as debt spreads continue to widen throughout Europe with major worries over the debt of Portugal and Spain. For the day, the markets will likely remain down as yesterday’s rally completely failed with gold and the dollar rallying. Keep an eye to that euro all day. The focus will likely be on early relative strength plays, big cap techs as they were all over the place yesterday, some of the smaller cap biotechs in the news (such as KERX), and the solars.

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- closed near a high

AAPL- closed near a high

RIG- closed near a high

SHAW- closed near a high after announcing it has begun discussions to extend its Westinghouse AP1000 agreement

RBY- closed near a high after issuing a positive gold resource estimate at its Phoenix gold project

FCX- closed near a high

AMRN- closed near a high after announcing positive phase III data for AMR 101

CLDA- to sell Familion pharmacogenomic testing unit

CAK- closed near a high after it announced gas discovery on the Zijinshan

ENMD- closed near a high

THRX- closed near a high after GSK announced it is going to buy 5.75 million THRX shares at 22.50 each

RITT- closed near a high

CIS- closed near a high

TYPE- closed near a high

BECN- closed near a high after posting earnings

IBKR- announced special cash dividend of $1.79/share

SODA- good earnings

DECK- featured on “Mad Money” last night

KERX- positive phase III Zerenex results

RIMM- upgraded at Jeffries

BEZ- to be acquired by ABB for $63.50/share in cash

TSL- decent earnings

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

CMED- share offering

ALTR- lukewarm earnings guidance

STX- announced it received no good offers for the company in its attempt to sell itself off; confirmed revenue guidance and established a $2 billion stock buyback program

QLIK- announced 10 million share offering

THO- poor earnings

MCOX- poor earnings

SDRL- bad earnings





Earnings:

TUES NOV 30 BEFORE

BKS SDRL TSL

TUES NOV 30 AFTER

CPRT OVTI


Epiphany Trading, LLC
www.epiphanytrading.com

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