Very quietly, the value of the Saudi Arabia stock market declined almost 10% in a recent three day stretch. No, I’m not talking about two weeks ago. I’m talking about Sunday-Tuesday. While the markets had a pretty nasty decline last week, most of the Middle Eastern markets declined even sharper. The burgeoning belief that the crisis will be contained to Libya led to a decline in oil prices (although still elevated from levels from three weeks ago) and a subsequent sharp rebound in domestic stocks. But the decline in the Saudi Arabia stock market cast a shadow over the rally. So what exactly is going on? Simply put, there remains widespread fear in the region that the unrest that has been chaotic throughout the Middle East shows little sign of abating and may even spread. In Saudi Arabia, the protests are peaceful but are in fact growing in frequency and breadth. Also, protests have now spread to another neighboring nation in Oman. In fact, following a 7% decline in prices last night, many called for the government to temporarily shutter the Saudi markets! Rumors of Saudi Arabian troop movement caused a 2% pop in oil yesterday and led to widespread selling in the U.S. As time goes on, I cannot emphasize enough- Saudi Arabia and everything connected to it particularly geographically such as Bahrain truly holds the key to the oil market for the foreseeable future…and will obviously be a major factor for stocks as well.
Markets overnight were down throughout the world with prices declining more than 2% in Tokyo and down just shy of 1% throughout Europe. Oil is sharply higher again to the tune of 1.5%. Bonds are down a little, the dollar is slightly weaker, and gold is a tinge off also. Futures are a bit lower. ADP data came in much better than expected this market…and the futures sold off. Odd. Crude Inventories are out at 10:30AM and the Beige Book at 2PM. The day will likely be once again dependent on oil…if oil prices hover here around 101, equities will likely chop around violently…the inverse of oil is likely where stocks will go in any other scenario. The focus will be on the earnings plays, energies (big and small), big cap tech in the news (such as AAPL), and relative strength plays particularly post-open.
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
ARGN- closed near a high
EXK- closed near a high
WYNN- closed near a high
SONS- closed near a high after posting earnings
PAY- decent earnings
GAME- decent earnings
RPRX- closed near a high
MCOX- SINA to purchase 19$ of MCOX for $6/share
Bad-The following stocks have bad news and/or a weak technical pattern
SODA- closed near a low after posting earnings
BID- closed near a low after posting earnings
CEDC- closed near a low after posting earnings
HSFT- closed near a low after posting earnings
TNS- closed near a low after posting earnings
FOE- closed near a low after posting earnings
RRC- closed near a low after posting earnings
X- closed near a low
BRK/B- closed near a low
RIG- closed near a low
WLT- closed near a low
AMZN- closed near a low
GOOG- closed near a low
JOE- closed near a low
CCME- closed near a low
MDR- poor earnings
QLIK- poor earnings
CLR- share offering
MET- share offering
DTLK- share offering
SINA- bad earnings
MBI- poor earnings
QPSA- closed near a low
WFT- restating four years of earnings by $500 million
Earnings:
WED MAR 2 BEFORE
COST CTB JOYG
SPLS WRES WTI
WED MAR 2 AFTER
ANW CPRT CQB
CVI DAR EXM
FL PETM PSS
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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