If you have a choice of selling a stock you’ve owned for a very long time and paying 15 cents on the dollar or 20 cents on the dollar, what would you do? If you’re near death and have an estate for $50 million and want to leave a nest egg to your heirs, would you have them pay 50% on most of the estate value or nothing? If you’re an average taxpayer, would you rather try to max out unemployment this year for tax reasons or would you rather get a job? Well, the answers to all of these questions- while seemingly obvious- are being debated in Washington. Furthermore, as the year progresses, these are the types of issues the market will focus upon. As of a week ago, nobody had any true idea of tax policy. Now, President Obama has made a proposal which takes in some Republican ideas and some Democrat ideas in trying to form a cohesive policy- no matter your political persuasion, there is certainly no debating that the proposal is a blend of ideas. The implications can be widespread; for instance, it will further blow a bigger hole in the budget deficit if it passes in its proposed form. But for the market, what happens if nobody knows? Will people and/or funds who have nice gains on long-term positions want to hold them if their tax rates goes up next year to the new rate? Questions like this must be answered with some certainty. So, particularly as the end of the year approaches, keep a watchful eye to all political banter and the likelihood of passage of tax legislation. It is very highly probable that there will be a compromise soon, but the longer this takes, the higher the likelihood of some selling pressure coming into the market due to uncertainty as people lock in gains for tax reasons on winning positions.
Markets were generally higher worldwide overnight with Tokyo up 0.5%, Hong Kong 0.3%, and London 0.5%. Gold and oil are up slightly with the dollar marginally stronger against the euro. Bonds are flat. Futures after once again shaking everything off yesterday are trading nicely ahead this morning. Jobless claims came in slightly better than expectations with wholesale inventories (0.8%) due out at 10AM. For the day, the strength will likely hold with the market in a narrow range. There should be lots of action under the surface with a focus on small cap momentum plays, earnings plays, big cap tech, and relative weakness plays (particularly early on).
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
SOLR- closed near a high amid receiving a couple of big orders
KFY- closed near a high after posting good earnings
OCR- closed near a high after naming a new CEO
BNVI- announced publication of data describing its estrogen receptor beta cancer prevention product
AAPL- closed near a high
GS- closed near a high
CRM- closed near a high
PPO- closed near a high
RDWR- closed near a high
ALTID- closed near a high after indicating it had been selected by Inversiones Energeticas to provide a turn-key 10 Megawatt ALTI-ESS advanced battery system for frequency control
IDCC- closed near a high
AVAV- closed near a high after posting great earnings
NFLX- near island reversal in closing near a high after its CFO resigned
KMP- featured on “Mad Money” last night
LEDS- 5.25 million share offering at 17 above expected range of 14.50-16.50
LULU- great earnings
TEVA- successful phase III study of oral Laquinimod for MS
FCX 2-1 stock split
SFD- decent earnings
ONP- good earnings guidance
Bad-The following stocks have bad news and/or a weak technical pattern
IVN- closed near a low on a decline in commodities prices despite Rio Tinto providing financing to the company
MW- closed near a low after posting awful earnings
SWHC- poor earnings
MATK- poor earnings
OXM- poor earnings
CMTL- poor earnings
WTI- closed near a low after losing out to BP in Royal Dutch Shell interest
RTI- closed near a low after announcing a convertible notes offering
GDOT- closed near a low after announcing a share offering
LINE- share offering
XNPT- share offering
CXO- 2.5 million share offering at 82.50
CML- DELL in talks to acquire company for 27.50
CAG- poor earnings guidance
Earnings:
THURS DEC 9 BEFORE
CIEN LULU SFD
THURS DEC 9 AFTER
GMCR NSM PLL
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
No comments:
Post a Comment