As the week (much less day) progresses, we’ll be hearing a lot about the Davos 2011 World Economic Forum which starts today. So, what exactly is this? First, it has the city ‘Davos’ in its name because the annual symposium is always held in he Swiss Alps town. In any case, the World Economic Forum is an independent, non-profit group with the sole purpose of gathering major figures from politics, business, and other intellectual individuals with the noble goal of improving the world as we know it. The theme of this year’s forum is “Shared Norms For The New Reality” with topics such as joblessness, the state of the world economy, and ways to increase globalization on the docket. People such as the CEO of Fortune 500 companies such as Pepsi to France’s leader Nicholas Sarkozy scheduled to be present. The last two years brought together stunned individuals with the focus on avoiding a new Great Depression. But the theme this year is definitely much more optimistic. So why should we care? Because policies can be quietly discussed there which becomes major forces for the next year. For instance, the same Sarkozy last year sought a re-do of the capitalist system with a focus on excessive bonuses- something that was dealt with by firms all over the world for the duration of 2010. Does Davos change anything? Sometimes. Everyone of course has an agenda but as just noted, if an idea gains traction, watch out. So, for traders, nothing should really impact the markets in the immediate-term per se, but keep an eye out just in case as there are a lot of important people there along with some major political and economic agendas on the table. Just as importantly, keep the other eye out for stories which can impact the markets and the economy for longer than the immediate-run as there inevitably is a thought or two which can and inevitably does affect the markets at one time or another during the course of the next year.
Markets were mixed in Asia with Tokyo down 0.6% but Hong Kong up 0.2%. However, the tone is good with Europe with Frankfurt ahead 1.2% and London tacking on 1.4%. Gold is quiet but oil nicely higher to the tune of ¾%. The dollar is marginally weaker. No major surprises came out of the speech last night so it left a vacuum for Europe to rally on the heels of yesterday’s late-day comeback. For today, New Homes Sales are due out at 10AM (300K), Crude Inventories at 10:30AM, and the FOMC rate decision at 2:15PM. The bias is higher after yesterday’s comeback. Look for a very quiet market day for the bulk of the session in all likelihood as markets mark time what with Davos and the Fed meeting. The focus will be on all of the many earnings plays, relative weakness plays, the education stocks, the Chinese solar plays, and healthcare (off of WLP earnings).
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
JNPR- decent earnings
DV- good earnings
FTNT- decent earnings
SMCI- decent earnings
KEYN- great earnings
TSS- decent earnings
MOLX- decent earnings
EWBC- decent earnings
PPO- featured on “Mad Money” last night
GTIMD- closed near a high
HF- closed near a high
CLDA- closed near a high
AAPL- closed near a high
NFLX- closed near a high
RKT- closed near a high
EAT- closed near a high after posting earnings
X- closed near a high after posting earnings
ASH- closed near a high after posting earnings
OESX- closed near a high after posting earnings
HOG- closed near a high after posting earnings
BHI- closed near a high after posting earnings
SBNY- closed near a high after posting earnings
TUES- closed near a high after posting earnings
GLUU- closed near a high after its ‘Guns Bros’ launched on Facebook
SSN- entered into a three-way joint venture with HAL for Hawk Springs Project
MSTR- good earnings
ROK- decent earnings
UAL- decent earnings
LCC- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
YHOO- poor earnings
GILD- poor earnings
ALTR- poor earnings
CA- poor earnings
SYK- poor earnings
ELY- poor earnings
MIPS- bad earnings
RFMD- bad earnings
MNTA- closed near a low after a competitor received approval for a generic drug
FSLR- closed near a low
GWW- closed near a low after posting earnings
BA- poor earnings
TXT- poor earnings
XRX- poor earnings
CBE- poor earnings
Earnings:
WED JAN 26 BEFORE
ABT ADP ATI
BA CBE COP
CP EK EXC
GD HES LCC
LM MWV OXY
PX RES RGS
ROK SAP STJ
TXT UAL USG
UTX VLO WLP
XRX
WED JAN 26 AFTER
ALGN AMLN CCI
CTXS CVD DRE
ETFC HRC HRS
LRCX LSI MMI
MUR NE NFLX
OI PLT PMTC
QCOM RHI RYL
SBUX SHOR SYMC
TER TSCO VAR
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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