Quick. Who is the CEO of Exxon? How about IBM? What about Best Buy? Pepsi? General Motors? Bank of America? If you did not know the answers to most or all of these in rapid-fire fashion, don't worry- for better or worse, you're like most people much less most traders including myself. Now let's ask a few more. Who is the coach of the New York Jets? Who is the founder of Playboy? How about the CEO of Trump Enterprises? Most people know at least one of those if not all three. Does it mean that the Jets, Playboy, or Trump Enterprises are any better or worse run than the other companies? Maybe. Maybe not. But the fact is that Rex Ryan, Hugh Hefner, and Donald Trump are synonymous with their companies with most details at the height of their power going through them. And admittedly, it is difficult to conceive of Playboy without Hef or Trump without, well, Trump. This theme comes into play with the announcement on Monday morning that Steve Jobs has taken a medical leave of absence as he continues to fight pancreatic cancer. I am not an Apple (AAPL) analyst, but Jobs has been the face of AAPL during its ascendance into the 2nd largest company by market capitalization in the United States. He has been the polarizing leader of AAPL albeit with a very strong team behind him. It's not for me to opine for six screens as to what will happen next. But this is why AAPL stock is acting the way it did yesterday in Europe and this morning state-side. It may be that the CEO of Best Buy may be more integral to his company than Jobs is to AAPL but perception becomes reality oh so many times thus if Mr. Market thinks otherwise, well, this is why AAPL shares have fallen several percent on the very thought that Steve Jobs won't be around at minimum on a day-to-day level for quite some time if ever.
Markets were fairly quiet throughout the world Monday with European markets in particular barely budging from unchanged. However, the tone although quiet in Asia but decided positive in Europe with most bourses up 0.5%-0.8% on positive talk made by several German and EU officials. Gold is ahead about 1%, oil down slightly, bonds up slightly, and the dollar notably weak. New York Empire Index came in flat with the NAHB Housing Market Index (16) due out at 9AM. Futures are mixed with the Dow and S&P up slightly but the NASDAQ down notably. The newsflow has been rampant and impacting many major sectors. The tone appears weaker than the numbers show with some downside likely today. The focus will be on big cap tech particularly the ones in the news (AAPL), the financials particularly those in the news and those with earnings out tomorrow, the earnings plays (EDU, FRX, et al), the small cap rampers from Friday (IBCP), and the semis.
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
BP- closed near a high amid anticipation of an agreement with Rosneft
SNDK- closed near a high
MA- closed near a high
APC- closed near a high
MOS- closed near a high following a raising of its price target at Credit Suisse
GS- closed on a high
IBIO- closed near a high
PNC- closed near a high
BIDU- closed near a high
AMZN- closed near a high
WYNN- closed near a high
GOOG- closed near a high
NANO- closed near a high after a positive Piper Jaffray report
ERJ- closed near a high after receiving an upgrade by Goldman Sachs
NVLS, BRKS, UTEK, SANM, ALTR, MKSI- closed near their highs after INTC announced it is increasing capital expenditures
ITMN- closed near a high amid a positive story in the “Wall Street Journal” on Friday
ASML- closed near a high on an upgrade from Pacific Crest
IBCP- closed near a high
TSON- closed near a high
SBIB- to be acquired for .2365 shares of CMA
ARIA- Ridaforolimus achieved primary endpoint of improved progression-free survival in patients with metastatic soft tissue or bone sarcomas in the phase III Succeed trial
DTLK- boosted earnings guidance
SEED- good earnings
PSTI- received “positive feedback” from the FDA after announcing its limb ischemia treatment will advanced to phase II/III clinical trials
EDU- good earnings
ARWR- subsidiary Unidym to be acquired by Wisepower for up to $140 million earn-out plus $5 million upfront
FRX- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
CSTR- closed near a low amid horrible earnings guidance
AIG- closed near a low on rumors of a big seller in the market as well as worries over its upcoming refinancing
ANR- closed near a low after revising 2010 and 2011 shipment and cost guidance
MEE- closed near a low on worries it may not be taken over
WLT, PCX- closed near their lows after FBR lowered its rating
AAPL- CEO Steve Jobs taking a leave of absence
DAL- poor earnings
FAST- poor earnings
CMA- fair earnings but announced acquisition of SBIB which may well be dilutive
C- poor earnings
MMR- poor earnings
Earnings:
TUES JAN 18 BEFORE
AMTD C EDU
FAST FRX SCHW
SEED
TUES JAN 18 AFTER
AAPL ADTN CREE
HBHC IBM LLTC
WDC
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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