...what's it going to take?
Tuesday, March 10, 2009 at 08:02AM Tuesday, March 10, 2009 at 08:02AM
Despite a broken tape in Asia/Europe overnight that had the US futs looking broke as well in premkt, the opening bell provided a quick squeeze that led to a flattish day till late as we closed off -7 SPX points. As the case recently, every uptick succumbs to a supply of sellers. Simply once again, no conviction buying follow through. It seems those expecting a bounce that see a mkt going down later in the day, just use the next uptick to get out their supply of shares and sell instead of waiting with another night of overnight holds to chance again a real move upwards. Patience is slim these days. One good thing we are seeing is a pickup in M&A activity, recently we had some potential deals in the AG-chem, the MRK deal and DOW- ROH went through. Of course, most of the rumors deals will be of the prey on the cheap side, but at least some noise is visibly back. We also like less noise from D.C the past few trading days, maybe the less they do say or try to do, the better chance the market can bottom on it’s own.
Usually, we have a case of mouths calling the market bottoms, nobody is doing that now at this level and instead calls for 500-600 gravity pulls are all over the place. We like this as well for a better chance to get a meaningful bounce from the 'Mark of the Beast' 666 level and so the same premise exists as in yesterdays Journal of sticking to the SPY/SSO/OIH trades. As far as the OIH trade, energy is the best performing sector on the day outside of Financials (S&P Energy+0.5%) as Crude ran up nearly two bucks to $47, main reason being cited is speculation of upcoming OPEC cut. As far as the recent stalwart tech, we can only hope TXN mid Q report is decent enough to get this sec going on.
Sooner than later this week, the hope is the House hearing on Mark- to Market (M2M) should make for a pre-earnings type move in the financials/ brokers ( the laggers JPM, GS eyes on) with market in tow. The anticipation trade is our hope this week. We also have G20 meeting this upcoming weekend that could make for some favorable action later this week.