Ahead of the open, (30-03)

If you missed Wednesday's action, you got a live replay today.  Shang’ fell another 1.4% overnight, US markets weakened in the morning, only to stem losses post Europe’s close...1-2-3... Only difference is yesterday’s losses were halved while todays spill to SP 1391 was almost fully erased back to a 1403SP close.  In the last 11 trading days, SP has closed 5x between 1403-1409, takeaway the squeeze on Monday and the market has really not done much since mid -March.  The same caution exhibited in the past few weeks is on show the past few days. This is due to the same ‘China’ worries rehashed over and over again, only difference this week is Europe (Spain) sovereigns are being looped in.

To put this week into perspective, we entered the week saying,…”This on the back of each major zones own headline noise: US...‘5 days of housing data adds to global growth concerns’, ‘China demand fears weigh on recovery’(Shang' off >2%), ‘Europe slides 4 days on sovereign concerns as yields rise’ (Europe off >3%).   You’d think the, ‘Hunger Games’  hoopla was stock market related this weekend until you check previous week’s closing prices and see only a 5 handle drop since”.  Almost a week later, we can almost repeat those words identically, except we see a 5 handle rise with 1 trading left to close Q on a positive note.

All in, the last 2 weeks seems like investors are anticipating a sell -off in April by doing some rebalancing, some profit taking, but US markets refuse to follow the Shang and/ or European bourses. The Bears are doing a hearty job of trying to instill fear, but it’s a lousy job at the end of day judging by the market boxscore.

Into the trading week, (02-04)

As the new Quarter begins, the only recap/flashback to Q1 needed is we’ve been ‘tactically long'  U.S equities for 150 SP handles  from premarket Jan 3rd on Global PMI’s right through to end of March, despite the negative tone arising out of China/European markets last few weeks.  While most will be consumed with the wild Q1 figures this weekend ie. BKX >25%, NASD >18%, VIX <30%, AAPL >45%, BAC>70% and so on, the only concern here is looking ahead, “Into the trading week”.  

So off we go….

Mid- week, Europe crept back up with noise about Spain (budget), extensions of EFSF/ESM firewalls.  Both of these turned out to be disappointments (Friday) falling short of expectations, yet market ignored and hardly a word was said on the subject after being a main topic all week.  Preference here was to ignore 'Spain' noise all week, both events turned out to be a non-events.  World can’t live without an EU crisis it seems and now the calls for its return have started with Spain.  In this view, am not going to worry until/if those 10yr yields say so.  So far, they have a widened just a tad.

China is now a growth scare as sentiment has turned to a hard landing occurring with resources, commodities taking a beating seemingly 1 day/per week on some related headline.  Again, just like with peripheral 10yr yields watch in Europe, show me a China 1H GDP less than 7% first before considering any cautionary stance on equities as a whole.  Even, that (GDP under 7%) playing out is not a given cautionary on equities.  This goes back to the premise “…commodity led pullback/correction, but not necessarily an equity one’.  For now, staying away from commodity linked equities as the case through March is enough of a security blanket.

Yes, China and Europe are viable and possible ‘red flags’ for a correction, but no more of a red flag than what the Q1 rally is now into Q2. The magnitude of the rally into a fresh Q2 is now a profit taking pullback/correction possibility that is just as viable at some point in Q2.  This (correction idea) stems from those who’ve missed the rally or just the typical Bear calling out for a repeat of 2011 Q1 –Q2 playing out.

U.S markets are heading into a long weekend ahead of earnings season.  These 4 days we’ll watch for pre-announcements b/c there is really nothing else on the corporate end.  The big Global eco’ data due to this week, particularly PMI’s are not so big anymore since Flash PMI’s in China (btw,Shang’ closed 02 thru 04) and the core European countries (Germany, France) disappointed.  If anything, there is upside market risk on better than expected figures coming out.  Here, the NFP# will be announced during market closure on Friday, the number here has tapered off a bit as well from recent numbers, but still expected to be ~215K.

All in, the quiet and conviction less market we’ve seen for a few weeks may continue this week, especially since NFP# can’t be traded until the 9th of April.

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Update: China PMI improved to 53.1 vs. 51(Feb.), consensus was 50.8. Increase to 54.3 in large enterprise PMI boosted this gov't number. The Bears will point to HSBC Markit # (smaller enterprises), which fell to 48.3 from 49.6.  This won't lift fog or resolve the near term growth scare outlook.

Ahead of the open, (03-04)

'NBS PMI, HSBC Markit PMI, Flash PMI'……How many more PMI's does one country need?   The China related PMI covered here for years has been called the ‘China PMI’ aka, NBS PMI.  This weekend noted, ”The Bears will point to HSBC Markit # (smaller enterprises), which fell to 48.3 from 49.6.  Where this one come from, really? Zerohedge?

The press debated more ‘mixed’ signals all weekend.  To be honest can’t remember debating the 2 surveys here (ever), so the fact market didn't react to the HSBC, but instead to the substantial ’official’ beat was good to see, ”China PMI improved to 53.1 vs. 51(Feb.), consensus was 50.8. Increase to 54.3 in large enterprise PMI boosted this gov't number”.

All in (China), “This won't lift fog or resolve the near term growth scare outlook.”.  A 3^rd consecutive expansion PMI doesn’t take off the debate of hard or soft landing.  More data points needed in the upcoming weeks.

Today, a steady 5hr melt up to afternoon highs of SP1422 on the heels of ‘better than expected”, US ISM.  Although all the right groups led, it was once again a slow day.   Anyone expecting March data to disappoint was hit with the ‘upside risk’ of better than expected data noted this weekend.  New month, new Q but the same themes persist.

Ahead of the open, (04-04)

To get around today’s loopy market action, we have to go back to the March 13th rally and to recall the day when CSCO and its CEO mattered to the market.  Today's erratic action comes ahead of the only thing left that matters (NFP#), this erratic behavior may continue due to the thin Global 'holiday' week(end).  (Shang' re-opens Thursday, most of Europe closed 6th & 9th.)

In this view the FOMC minutes was a non-event coming into the day.  Unfortunately, the market fatigued and expecting an April pullback succumbs to what is literally 'old news'.  On March 13, FOMC communique was, …”close to expectations, (a tad hawkish, yet slightly more upbeat on economy),(13-03)….TSY’s/GOLD decoupled from equities that day after being in sync throughout the rally. “What has seemingly occurred hastily is a price removal of QE3 additives”.   The minutes confirmed the FED would be sidelined, yet market initially reacted as if its feeling were hurt.   All that has happened since FOMC was Bernanke (on his recent tour) a bit dovish on the job front.  Seems quick traders went short the recent dovish remarks into the minutes knowing full well the minutes would be hawkish and not fulfil these fresh dovish expectations and covered quickly as GOLD/TSY faltered with equities doing a 360. The hawkish March 13th trade went back into effect. The equity market closed almost exactly where it was at lunch hour while TSY/Gold closed near lows.  Still, the action is puzzling as we've had 'good' eco' data since FOMC/ Bernanke tour, which should have left few leaning 'dovishly' sided.  Minutes also signalled it's not reverting from, 'very accomdative', which should be enough.

The losses on the day that did stick can be attributed to CSCO’s (Chambers) remarks at a conference from 11am. Question is who is Chambers in 2012?.  In this view, besides saying nothing really material, he really doesn’t have that much clout with the market these days.  Again, a little puzzling market reaction.

All the above was seemingly not very incremental, which raises some short term questions.  It should be about the NFP# now after getting the 'better than expected- feared' PMI's out of the way.  A few positive bits appeared today from a China official and a resource corporation on China GDP/growth, but recent noisemakers conveniently overlooked this ‘hot’ March topic today and were playing a different card or two.

Ahead of the open, (05-04)

As European (particularly UK) traders began preparations to head out for a 4 day holiday, a sea of red was being left behind for U.S markets premarket.  By the time they exited the offices at close, Europe’s leading blue chip index, DJ EURO Stoxx had dropped ~2.5%.  Believe me, these guys take their holidays seriously and nothing will stand in their way to get on the road (or pub), even on a day where UK ‘green shoots’ appeared as the economy expanded nicely.  Not to say the ‘holiday’ week was responsible for the markets falling, but it did play a part overseas and in N.A markets. 

The facts were : Eurozone service PMI’s pointed towards a recession..again(widely held view its been stagnating), Draghi cutting taps off post LTRO, a poor Spanish bond auction (yields now up to 5.7%) was a test gone bad on their budget proposal and we were back to Eurozone blow up fears.  None of these are surprises or something we haven’t been through the past year.  One thing to ask is if these ‘here we go again ‘ fears are major, what’s up with Gold or rather ‘down’ with Gold?. (low of $1,613)

If the European sour lead wasn’t enough, the US markets were dwelling on the FOMC minutes, services ISM came in a touch light, an IBM d/g and a SNDK pre-announcement took a technically vulnerable SOX/ tech for a ride down, while almost every other 'right' group also played a part in the broad market decline. Financials, the beneficiary of stable credit markets overseas felt the poor ‘Spanish’ auction.   CRX, which we’ve highlighted with weekly <1% losses in March had its worst day of ’12 falling just under 2% on the stronger USD.

All in, negative slanted pieces abound, but selling didn’t seem panicked in a thinning liquidity atmosphere. It felt like some of the profits out of the crowded longs were being taken and nothing else.  A SP1398 (-1%) close isn’t that bad considering the news flows encountered today.  It’s doubtful any investors will come out Thursday in an already thin market, so traders will dictate market direction.

China might be interesting overnight as they come off the Tomb sweeping festival.  Will the Shang’ feel the healthy PMI or follow Global markets?  SSS retail #’s for March out Thursday. NFP# now at 205k consensus for Friday.

Happy Easter Holiday and Happy 'Opening day' MLB

Into the trading week, (April 9- )

While this week’s market cries for QE, the much weaker NFP# is not a done ‘QE’ deal as many would like to believe.  Main reason is one report of anything does not make a ‘trend’.  Now, Initial claims are a ‘trend’ and this weeks # didn’t disappoint or point NFP# to a new trend.  Also, the avg. is still >200k in ‘12 and other factors such as work week, hrly earnings provide support. 

*Note, if FED was to commence any QE off just poor NFP#’s ahead, it would be negative for equities as it would imply poor growth ahead expectations. 

At first, market has reacted as would be suspected, equities futures sunk, gold rose and TSY yields stumbled.... “ A few other supports are in the 1370’s.…”It would’ve been ideal spot for dip buyers to pounce….., but no such luck today!.”,(22-03).   Likely and ‘Luckily’, it might have happened this time while cash markets are closed with ES falling to low of 1372 (1375 closed at). The Feb peak and May 11 SP cash peaks should hold and this will likely be another shallow pullback.  A correction will occur later if/ when (May?) market closes sub 1370 consecutively.

Trading was skewed to fast traders dictating moves in ES/ ETF in the latter part of this week owing to thin holiday liquidity and they will continue to play into Monday’s open. But, investors will likely buy the opportunity and single stocks will likely come out looking fine.

Europe,  Spanish bonds/yields will continue to be in focus.  Last Thursday, ECB’ Draghi basically said jump in borrowing costs is market saying governments need to deliver without the expectation of ECB help.  Focus is on individual govt’s now to act in good faith after liquidity injections. This bump in yields is not like year’s bumps, it’s not fear of systemic risk at this point as before.

China,  Shang' opened up well post PMI, eyes will be on more April data covering March to see if growth has stabilized after probable distortions from New Year holidays, which usually makes for patchy data in Q1.  Some key indicators coming up this week and next.

When the debate here of QE vs. growth was lingering, a small possibility was that of ‘escape velocity’ growth. Appreciably stronger growth was never seen and/or discussed here.  The disappointing  NFP#  takes the upside risk of escape velocity off the table.   We’ll be back to moderate growth forecasts as was the expectation before ‘escape velocity’ talk made the TV circuit rounds.

All in, NFP is the sole data pointing to the economy rolling over.  Other related data is still showing strength and so more negative signals (so far just only small spots ie. Auto’s,construction declines in Feb.) are needed to become believers in NFP# to an economy losing momentum.

U.S  eco' data this week is on the quiet side, includes Initial claims/ International trade #’s (Q1 GDP related)

Into last weeks trading, noted to watch for pre-announcements. We got a bunch from some known tech names, SNDK, PLCM, PMTC.  This was quite disappointing heading into reporting season as it’s a change from ORCL, ACN recently.  Adds fuel to an already projected messy and lackluster picture for EPS season.

Ahead of the open, (10-04)

It was no surprise some selling occurred at the open, this was primarily due to fact ES Futs staying in-line with Friday’s lows and not bouncing prior to opening bell.   Once this action washed away, it was clear by 10 am selling didn’t hit single listed stocks as speculated Friday post NFP#.  Although RUT  was underperforming, individual equities closely followed here were fine considering the NFP# news.  A half hour later the leaders such as AAPL, PCLN reversed 25 point losses between them to trade in the green.

Still, buyers weren’t very enthusiastic to buy the broad dip as often the case on the first day after market gets blindsided by a big loss, but this was offset by sellers not continuing their early efforts.  Market held Feb high, peaked at SP1387, but leaked to a close a few points ahead of the Friday’s SP close.  In all,  the ‘preview’ on Friday, not to ruin ones long weekend after the poor NFP# and hopefully keep one from selling this morning, played out.  If the news did scare and you fear a broader down consolidation coming, at least you could've exited at pretty well breakeven prices on single stocks by holding out longer today and/or even bought some new stock to flip into the day for cash flow profits.

Markets still in holiday mode (Europe closed) and low bar set (-2% in sequential earnings) earnings around the corner made for a quiet day. It looked like investors weren’t about to bet (just yet) on weather the economy is rolling over or not, which is the outcome we were looking for here. The consensus ' slowly' emerging out the NFP# is it's not as ugly as the headline and/or a game changer by itself.

Ahead of the open, (11-04)

During US premarket,  SP futures were green despite the major Euro DJ Composite down a 1%.  Considering the equity meltdown that transpired (-1.6 to -1.8% on major U.S indices), it seems most likely were thinking Europe was just playing ‘loss’ catch up after being closed since pre- NFP#.  Judging by the 1% morning loss, you could say Europe was also sleeping at the wheel to its own stresses as peripheral yields had already swelled in Spain to 5.89% and Italy’s to 5.57%.  Each peripheral widened further (~25bps) by its markets close, Spain’s borrowing costs closing just under the 6% important level.  A nasty back-end ensued in Europe as the composite fell to a 3% loss, an impulsive U.S sell off followed with none of the usual post-Europe close buying visible. 

What’s ugly about the whole day is the ease support was sliced through today, (Feb peak, May ‘11).  After just pointing out dip buyers rarely come out immediately following a big breakdown, the losses extended today as buyers were nowhere in sight.  SP slid all the way to SP1358 and through 50MA as well.  You don’t see this type of action often.  Although SP had already slipped through SP1370 by noon, individual growth stocks didn’t get licked till afternoon when volumes/action slowed down. This seemed more characteristic of no buyers present and a handful of sellers hitting the thin bid columns.

All in, the symptoms have been building for an ill looking day/week. (China hard landing?, NFP# signalling an economy rolling over?, Euro crisis returning with vengeance?.  A medicine for support failed with intraday technical breaks SP/ES/ETF’s).  Market needs to close over SP1370 by weeks end or this could be a prelude to a longer corrective phase as technical damage will be present.  The ‘macro’ question marks above all have a ‘fix’ eventually (via eco’ data & Euro external interventions/EFSF/ESM, even SMP buys or internal gov’t policy).   The technical equity 'fix' depends on those sidelined during the rally coming in on this week’s impulsive, poor price action.   Any immediate bounce will likely struggle to sustain itself with only fast traders aboard and without ‘fixes’.

Ahead of the open, (12-04)

A decent morning gap open as ’longs’ had a few things going for it.  Firstly, peripheral yields had recovered a big chunk of yesterday’s surge as ECB & French officials defended Spain saying it is not ill and all is exaggerated  and ‘interventions’ are there to use.   Also, AA’s better than expected call played the healthy economy card factor in favor of the longs.  Unfortunately, a few calming words and a few reports won’t turn the cautiously sidelined around so quickly.  This was clear as the SP flatined all day and failed to regain 1370 by the close.  Some relative weakness in leaders didn’t help the matter.  Still, SP 1370 wasn't so formidable on the downside and the same may be true to the upside, if just a little buying comes in the next 2 days.  Any fresh shorts at this level will likely pull the plug quickly.  On the trading front today, one of those days you hate if you had no holds as single stocks did little after the gap open.

Judging by the covering bounce, the market will be back to chopping around intraday, overnight on Europe ‘comments’ as was the case for so long in 2011 until yields stabilize.  It’s a pain, but it does make shorts eager to cover on each ‘calming’ story. This should bring some stability, support for the market as soothing comments are upside risks to shorts.  Unfortunately, the first thing you look at in the morning is where the Spanish/ Italian 10yr yields stands.

Overall, despite the pared losses it wasn’t really on conviction buying, just covering.  A pretty positive Beige Book couldn’t do the trick to get flows going in the afternoon.  In all, just a few small pieces of the puzzle to the ‘fix’  discussed previously.

Ahead of the open, (13-04)

Wonder how many were making lunch plans before the opening bell not expecting much action?.   It probably didn’t look all that promising for ‘longs’ post Initial Claims # coming in higher than expectations, while shorts positioned at yesterday’s SP 1370’s levels were likely thinking Wednesday's intraday flat line and close at lows was foreshadowing a dead cat bounce at (1370) resistance.  Oh well..

DJIA +180, SP +19, NASD +39 day has many ‘longs and shorts’  scratching their heads of how the strong gains extended for a second consecutive day.  I’d like to think it was simple as a lead into ‘Ahead of the open’… “Still, SP 1370 wasn't so formidable on the downside and the same may be true to the upside, if just a little buying comes in the next 2 days.  Any fresh shorts at this level will likely pull the plug quickly”.  The premise was that the break of SP 1370 was too easy.  The fact fresh shorts would come in here would seem natural considering market fell all the way to SP1258.  Also, many shorts were likely caught of guard due to the speed of markets falling this week, so SP1370'ish flat-line yesterday was seemingly perfect to lay out fresh exposure if you missed the fast downside.  But, (if) any good fixes hit, longs would push them to pull the plug quickly.  That’s pretty well what happened today, once the market opened and 1370 was regained early, it didn’t take much time for longs to run the new shorts out to pasture. 

Yesterday, pointed out some  small ’fixes’, today we had EU yields down again, Italian auctions were not as bad as Spain’s recent, calming the market to start the day and some more U.S  ‘fixes’ in upside earnings, TSCO, WAB to start the day, eco data (we pointed out International trade for first time last weekend as an eco' data point /GDP now will be revised for Q1 after today’s #). <Funny, Kudlow opened with this trade# tonight.   But, maybe the biggest ‘fix’ that got longs in and shorts realizing the upside risks were hitting them across the head was China GDP whispers of 9% out tonight after a slew of data overnight came in better.  Also, a WSJ article on coal bottoming also helped the commodity field.  Doubt GDP will come in as high as the whisper above (consensus is 8.4), but if it’s anywhere around 8.5%, commodity linked stocks can be picked at/traded again after taking March off.

This was redemption day for some long traders who didn’t see gains if buying post-opening gap yesterday.  Today, you were generously rewarded for yesterday's buys and/or you could have bought stocks flat or red and come out with nice gains as the market climbed steadily from SP1368 to 1388, start to a strong finish. Complete opposite of Wednesday's action.

Post Tuesday’s abysmal day, we discussed the potential of upside risks if ‘fixes’ started coming in.  Well, some fix has hit every aspect of the Bears case since…China, EU, eco’data/ earnings.   Interestingly, both days had shorts covering in different ways. Those already in overnight after Tuesday’s big losses likely covered at the gap open Wednesday and/or later joined those who threw in fresh shorts in the 1370’s Wednesday also ran today. It’s hard to know how many real longs are into this to get past SP1400.  More data is still needed. 

Also, the first negative turn on Wednesday (before many of the stocks here finally started to see some losses) was the growth retailers that started to pause out in the morning.  Today, this group lagged a second rally day with most generally flat on the day ..LULU FOSL UA RL PVH VFC ULTA KORS.  This retail bunch could be a key to watch for market clues here, maybe China retail #’s overnight will kick these into gear.

Into the trading week, (April 16- )

Quite fittingly Friday’s flop of slop market losses put the week into perspective. Every trading day last week, including an overnight session was ugly for either a Bear or a Bull. The SP market may have finished 2% lower, but daily volatility in both directions likely didn’t make anyone a big winner or loser. Thursday’s close was strong, Friday’s was ugly. It was no coincidence market looked like it was aiming straight for SP 1370 the last hour, the SP 1370 importance was noted into Wednesday’s trade, “Market needs to close over SP1370 by weeks end or this could be a prelude to a longer corrective phase as technical damage will be present”.  Guess, getting above and holding that mark saved the week, but that's little comfort for investors who don't invest on technicals.

“It’s hard to know how many real longs are into this to get past SP1400”.  Friday’s action pretty well clears that question up. It was a week long fast traders market with most of the action in ES/ETF’s.

A look at your Shadolwlist/watchlist (below) will likely confirm investors are not dumping stocks, instead just watching Spain standing aside with caution. Again, will bring up GOLD and the fact it’s not being seen as a safe haven, if systemic fears are prevailing over Spain.

Last weekend’s, “Into the trading week”, was broken down in the order of Europe, China, U.S eco’ data and earnings. That’s pretty well how it played out in market importance. The European havoc this week almost makes you forget we just had a holiday weekend and an NFP# trade to deal with early in the week.

As far as Friday’s action, China GDP not only missed the 9 handle whispers, but slipped to just above an 8 handle at 8.1%. Still, it was not really a market concern b/c all important March #’s inside(IP , retail, loans) recovered and improved signalling a pick up. (Jan/Feb growth bottom likely with a 'hard landing' off the table(again). Also, it triggered more RRR easing expectations.  Resource stocks in Europe were acting fine in EU early on.

Instead of China, markets were back focusing on Europe/Spain. A few days ago after an overnight upside gap...” Judging by the covering bounce, the market will be back to chopping around intraday, overnight on Europe ‘comments’ as was the case for so long in 2011 until yields stabilize.  It’s a pain, but it does make shorts eager to cover on each ‘calming’ story. This should bring some stability, support for the market as soothing comments are upside risks to shorts. Unfortunately, the first thing you look at in the morning is where the Spanish/ Italian 10yr yields stands. Unfortunately, the ECB calming and setting fears into the Bears had worn off after a few days with a 30 SP handle reversal. The morning story was ECB loan data. Spain hit the ECB liquidity for nearly double the February amount = popping yields closer to 6% and no ‘empty’ ECB comments could have done anything today. The only ECB comment, ”we see stabilization in sov’ debt market and will act when needed” was like shooting itself in the foot as yields were coming in on 6% again (hit 6% later before easing off end of day). You can’t fool a Bear with the same tricks over and over again. All in, Market wants intervention as it has little faith in Spain dealing with its problems ‘alone’ since PM’s budget comments triggered a bad auction to ignite this week ..” a poor Spanish bond auction (yields now up to 5.7%) was a test gone bad on their budget proposal and we were back to Eurozone blow up fears”. Apr. 4th Upcoming week all focus on bill /bond auction go 17th /19th and Draghi on 17th as well.

US eco’ data, noted it would be a quiet week and what was relevant data was mixed. In all, no hard signals for economy rolling over post NFP#. Market decided to give benefit of the doubt until more data.

Earnings, if Spanish auction go off decently and relieve some stress, then ‘earnings’ may become the positive spin to the market. Amongst all Spanish hoopla, better than expected earnings were being ignored. It’s understandable, but we can quietly add SHW, CP raising # and even a few foreign names to those already noted reporting positively. This doesn’t even have to do with, “low bar set (-2% in sequential earnings) earnings around the corner”. These are just good reports!. The pre-announcements in tech is where the low bar might play out.  LLTC, the stock we always use as a barometer to start tech earnings is on Tuesday. In all, industrial are coming v.good, financials are off to a decent start and now tech gets going. The market will know and come to a conclusion very shortly what the trends are ahead, it won't take a month’s worth of reports. At first glance, it may not be as lacklustre and messy as anticipated.

Shadowlist- 50- 50% split of stocks in black/red on 2%SP downside week.

Ahead of the open, (17-04)

A weird tape, yet support on the SP 1370 not broken yet.  A sideways session for the broader market at the end, but an underlying market consisting of growth and best performers succumbed to tandem profit taking.  Considering this is as bad as it got with Spanish yields widening over 6% is a relief of sorts.

The heavy hitters like AAPL, PCLN, MA, GOOG  the most visible casualties, but the underperformance in growth ‘retail’ stocks like FOSL, RL, PVH VFC , not living up to the overall retail sector performance following better than expected retail # was a head scratcher.  Still, despite better retail # in China last week and now here this sector can’t get going.

A lot is being made of AAPL’s slide threatening to take the market with it, but at this point with its action coinciding with other growth stocks is likely more of a rotation of sorts for the time being.  Not a safety relocation/ rotation into TSY or GOLD, but one where the cash is being spread out in equities.  Example, see the PC’s/Semi’s in the black today as ‘tech’ gets slammed.

The ‘weird’ action is likely not a very long term phenomenon.

Ahead of the open, (18-04)

All the fear mongering over the ‘heavy hitters’ threatening the market, especially noise around AAP’s recent performance resulted in a lot of folks caught off guard and chasing the market to SP 1390 today.   SP1390 is only a few percentage points below 2012 highs and AAPL has done a round trip this week.  A better than last Spanish auction (yields were down to 5.87%) and a better German sentiment number got the sentiment going and U.S earnings were the icing on the big rally day.

Still, despite DJIA up ~200 and NASD up 54 and AAPL’s round trip, investors were using the rally to pick off some profits from this year’s growth winners.  It wasn’t really noticeable because all stocks bounced, but the gains were only in-line with the indices. (usually  winners outperform on days like this).  Considering the broad market gains, it further suggests yesterday’s premise, ”cash is being spread out in equities”, not rotated into safe havens.

The day was not quite perfect and probably suggests last week’s volatility will continue for a little longer. Surrendering some gains before a try at SP1400 is probably in the works short term as a lack of direction persists.

In all, today buys some time and relief as SP 1370 acted like support this time after consolidating a few days.  The bigger auction of Spanish bonds is on Thursday, but today’s ‘bill’ auction going off well enough should allow investors to shift focus some.  The shift into ‘earnings’ was the hope noted, ‘Into the trading week’.

Ahead of the open, (19-04)

A little give back, a little digestion post big day.  Really not much going on, except maybe a better sentiment towards Europe as Spain negative headlines (bad loans data) was shrugged off ahead of the main Auction on Thursday.  A better picture of what investor sentiment towards Spain will emerge from the auction.  Still, it likely won’t be a catalyst to solve this 1370-1400 SP range as conviction on both sides is lacking.

All in, on a boring down market day, it was nice to have 3 of the best performers in the market (all up 10%)off the Shadowlist.  PII, URI,  earnings winners again and  SXCI up on an acquisition. Upgrades were flowing all day for the 3 stocks.

Ahead of the open, (20-04)

....8 SP handles down today, 6 handles yesterday and Tuesday’s big rally is cut to about ~8 handles.  The loss of momentum following the rally is hardly a surprise and neither is today’s whippy 1,370.30 to 1,390.46, trough to peak day.  As noted post rally, “The day was not quite perfect and probably suggests last week’s volatility will continue for a little longer.  Surrendering some gains before a try at SP 1400 is probably in the works short term as a lack of direction persists”.

Today, although the Spanish bond sale was well received, it met the speculation here,…”it likely won’t be a catalyst to solve this 1370-1400 SP as conviction on both sides is lacking”.  Basically, market rallied on the Tuesday’s ‘bill’ auction as sentiment improved and negative related headlines were shrugged off since.  Markets proceeded to ‘sell the news’ as this auction going off okay had become the expectation in the last 48hrs.  Euro composite slid and yields rose once the auction was closed.  Unfortunately, besides Spain woes likely to continue, market is beginning to focus on upcoming elections (France, Greece).

All in, quite a few things to cover regarding earnings, eco’ data, EU debt crisis, but will wait to do it over the weekend.  It will likely be quiet on Friday with little to disrupt the 1370-1400 range.