Best in class now...what than?
Thursday, October 15, 2009 at 07:58AM The hoopla of Dow 10000 2.0 was almost comical today, included in this hype is the idea of billions of sidelined money coming off the sidelines in a psychological move once 10,000 is regained. What many are missing is the inflows of capital since April has been even steeper than back in 2003. A lot of the money is already in and will continue to flow in the rest of the year. It's just not going to sunshower all of a sudden because of 10k is our opinion.
Short term….Maybe, it’s the Canadian in us, but we think it’s a better idea to put on a hockey helmet as we creep closer to SPX 1100 than a Dow 10K 2.0 baseball cap as was the fashion on the trading floor today. We hope we see some consolidation tomorrow and we hope geo-political noise (Israel saying they will attack Iran after Dec.) does not take away from the earnings parade. Crude related stocks may be a trade tomorrow on this. Casinos and China travel co`s may see weakness and be shorts for the day as restrictions are tightened to Macau.
A trading note…Was there any question we’d do a 10K close? Well, if you pay attention here you have seen us alert on market direction due to the close in Europe. Did you notice the discrepancy today at noon when the FTSE CAC closed?. Those markets closed up 2% and we were barely up 1%. As often the case when you have such a differential, the European money comes here and drives us closer to the results across the Atlantic.
As great as it was to see INTC and JPM put in amazing numbers, even CSX helped the transports. A drawback is definitely here is the ‘Bar’ has been set very high at the beginning of earning season for financial and techs. Best in class reports come early, everyone else following starting next week or so has high expectations to meet now.