Fizz'

“It’s hardly a touchdown’, played out all day as the markets breakout was put under ‘review’ and thus spent the entire day in the red.   A pullback into the ‘red zone’ (1280-1260) was negated (possibly only for today) by the special teams (dip buyers) coming in near the close.   Until earnings flow picks up, the market will remain in conundrum.

Wary -  Today’s was something discussed here recently…”… inflation number this week as it raised concerns of ECB hiking before Q4.”. 01/07.  At that time we were also watching if Bernanke signalled ‘hawkish’.  Today it was Trichet/ECB making a ‘hawkish’ turn and soaring the Euro and making the markets think a hike before Q4. 

As it’s shaping up, earnings season will have many ups and downs.  Although the lack of pre-announcements this Q should signal a better Q4 over Q3,  it’s really a mixed bag so far with CSTR, INFY  big disappointments and a SAP (Software) upside surprise.  Considering, SPX ~1280 has been an excuse to take some profits, (watch for) don’t be surprised to see this pass to stocks and a sell on the news earnings reaction.

Shadowlist

• Momentum/earnings/“winners of ‘10 –   These linked stocks are waiting on earnings as they are not being chased higher and instead the way to make a point or two off them is to buy an early dip if it presents itself on most days .  INTC  earnings are becoming less relevant as they are behind in the ‘hot’ mobile chip story with NVDA/ARMH  since CES Vegas.   A dinosaur won’t generate excitement off its decent report. CSTR  negative pre-announcement does nothing good for the momo names.
• Commodities-  Yesterday,  we basically left only the Ag’Fert trade on the table short term post ACI (coal) earnings note. Today, even with a weak USD, commodity linked stocks decoupled.
• Consumer -  Shadowlist addition: SODA, was the good market fizz today heading 15%/5 pts higher post -alert and is a reminder of why we want to have cash on hand if this was an earnings report to jump on and also why we don’t want to be holding into earnings in fear of a CSTR.