..planting a seed
..maybe this is what this low volume day after day has been all about recently....planting a seed....Consolidation.
Okay...lets continue with the disconnect discussed heading into the week between our primary list of stocks and the market indices, except this time lets turn over the table!. Why?. Simply..Monday was one strange looking day in our eyes as the market contained gains most of the day while our commodity rich list lagged until about 2:00-2:30 pm. After the slop trading we saw most of the day, our stocks improved late while the indices started to suffer some and finished only mildly higher. All morning, we were hearing and really not seeing the strength in the financials that was pulling up the indices. The prices in the the GS's of the world were only slightly higher early and with the drug problems on the street led by MRK, we were not in one of our lets get a rally going off the financials back this day. It wasn't going to happen as the day brought no headlines from the bunch as well. Maybe Tuesday the financials can turn this into something more and we can say those April "FOOLS" rallied the market. The problem or best described as an opportunity possibly was the action in the commodities, specifically the Chem-Ag's that slid off the "planting seed' report. We've talked for days straight about looking for an opp to buy on weakness and yesterday we got that in many a name in these commod' sectors. Basically, the Ag's sold off on news, maybe even a slight EPS miss you may call it as the USDA released the planting intentions of farmers.
The USDA reported farmers planting intentions in corn of 86.014 mln acres vs the USDA's prior estimates of 90 mln, the American Farm Bureau's estimates of 88 mln and the Dow Jones Newswires survey of 22 analysts estimate of 85.7-89.8 mln (creating an avg estimate of 87.387 mln); wheat planting intentions of 63.803 mln vs USDA's prior estimates of 64 mln; soybeans planting intentions of 74.793 mln .......
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BLAH, BLAH thats our view!. You can't control the weather and these numbers can be turned around in a few days because of it. Our only concern is the hedgies and as long as they are around that will be the greater factor in determining this sec's fate. Late in the day these improved and should send a positive signal out there.
So, if picking up 'cheap' shares on a boring green day is some kind pre- April Fools joke, we all may be in trouble!. We don't think so. This wasn't a running of commodities out the door like recently seen, it was orderly but was widespread. We'd look for a play or two that didn't rebound as much, eg a CMP over a MON.
MELI, we took it out of the closet and bought into the news of them withdrawing their offering. This offering has been a drag on the stock since January and should give it some reason to move now. The other reason to consider this big past winner here at DJIM is if you ask the question of why they did it. This stock loves rumors and this may give it more in the way of interested parties in MELI. Is there something on the table for MELI for real now?
On to Q2, it can't get worse than Q1 on the indices!