..now just repeat

As if on cue (DJIM's ;), despite a very ordinary flat open,  the market roared soon afterwards for the first hour…”we may have some follow through with risk assets (commodity linked stocks, growth stocks) playing some catch up.”. After days of underperformance, it was the RUT~2%, not the DJIA that pushed the market to SPX 1300 as ‘ dead cat bounces’ just discussed in our ‘momentum and commodities' section updates ensued.  Rotation occurred as the materials/ tech(momo) led the way.   All in,  the RUT excelled, but this is only a dead cat bounce until it at least makes it back into the Sept – Jan channel (closed at ‘R’).   The NAZ faces the same 'R' in its chart and both are hovering around 20ma.  It was nice to see short covering (mostly) in the first hour come into ‘indvidual stocks’,  but the lack of conviction for further gains is still evident as the market flaltlines rest of the day.  On the SPX look to 1307’ish for “R”, not 1300 as an Initial claims under 400k should spur a move.

Shadowlist

• Momentum/earnings/“winners of ‘10 –  The flyers, CRM RVBD NVDA RHT etc.’ finally caught a bid due to…”positive takeaway it was FFIV’s reversal from $102 -$107 in the green. ….Earnings positive was an upbeat JNPR”.   JNPR, ^1.50 /4% off premarket price after a subtle earnings reaction, it speaks volumes for many techs’/ clouds so it definitely helped the sector mood. 
• Q4 earnings update - we’ve been anticipating better EPS reactions post FFIV AAPL GOOG due to bar being lowered and today small caps were prime examples of this occurring from JNPR, FNET, MSTR, KEYN.   AMC, NFLX  fits into this premise as do a bunch of strong tech earnings with favourable reactions. (QCOM TER etc.)
• Commodities –  Materials, one of the top sectors today climbing ~2%.  Steels, (X)  led early, related name CLF  and WLT  joined in with nice days.

..another pack

It was a actually a good underlying tape to market naysayers as a few ‘defensive’ sectors led the market higher, but as far as DJIM’s underlying ‘Shadowlist’ tape, it was a second consecutive day of managers swallowing PA pills of mid/small caps as evident in the R2K's 2:1 outperformance of the major indicies. (*DJIM not liking SOX performance for a NAZ up >20pts intaday).  Yesterday’s winners rested and a fresh batch of DJIM plays took over. (see attachment on site). R2K is at 2007 levels. So all cool here today, but broad market is probably signalling a halt coming due to some internals today.

We entered the week in anticipation of …1) “…many are behind the ball on it (as in surprised).  This coming into a month end/Q end is where a PA pill (performance anxiety) will likely be swallowed by managers to play catch .. (many thought it was done with prior weeks gains because many times front running the final week occurs). 2) There’s a cluster of “R’ around 1313-1319, but once a close occurs over, the market will have higher sights in mind and it should happen this week. 3)  rally…”It could continue until Friday as investors/traders await all the data/QE2 for that day.”. 

Taking into account all 3 have taken place this week, today was another 11-12 SPX at day’s peak to March highs, so thoughts of continuation over new "R" into Friday morning is a little too much to imagine.  All in, the market has set itself up (disappointment?) Friday’s eco data, notably Global PMI’s and the effect all the Global macro issues (Libya-oil/ Japan) have had on the numbers.  The NFP# shouldn’t be as important, but if it surprises big to the upside it will likely be a negative for market as Fed comments have become more ‘ hawkish’, as some today.  Note, we are another “R” cluster to low 1330's-1335, still a break is clear sailing to years highs.

DJIM #16 2011

Heading into DJIM #15 week, it was noted the market didn’t really know what's going on the corporate front (earnings) from recent indicators (Japan impact/ some smaller co’s earnings/ data points).  

A week later and disappointments from AA JPM GOOG BACK INFY , hardly resolved anything, although just looking back at those pretty big names covering a broad view of sectors, many are left scratching their heads as to how the market didn’t resolve itself more than .5% to the downside by week close. (Unfortunately, single stocks didn’t find ‘elusive bid’ to close above 1321 as per follow up Fri.morning comment).  

Add, big Washington question marks (debt ceiling), Euro debt déjà vu and Bears must be thinking what's it going to take to get longs to sell holdings?.  They already know their comrades are incapable of pressing as the market just tested a cluster of support this week and instead bounced.  Also for good measure, let’s note the fact 4 of above corporations announced just in the last 24 trading hours and the market still managed to rally some ~12 SPX pts from overnight lows.  Okay, let’s also add ‘safety' sectors outperforming and most likely go ‘Huh’?. 

Is it just the same Bull market resiliency we’ve discussed for 2 years now or is this market just waiting to reach a crescendo of headwinds and buckle its knees in a late April correction (..As said last week, investors need to see value in stocks to keep the trend in tact for Q2 or market risks a correction later this month, earnings are the big key to that”,  early April.  Also, recall, post- Japan/surging oil, Global ISM’s pleasantly held up, but it was noted here they could just be delayed and be terrible once April #’s released.  Question is, what if they aren’t terrible?. What if Washington makes headway during it’s recess on debt ceiling legislation? (which it still can prior to May 1).  What if earnings/outlooks start to come through as we hit the majority of SP500 co’s in the next 2 weeks?.   Well, folks..'what if's' in this business is called “UPSIDE RISK”.  Shorts fear it and the big money knows it can rally the market, so they wait on the sidelines for any of these potential catalytic events.  

All in, murky broad market waters, but DJIM emphasis has always been on single stock selection linked to earnings and as we head into the eye of earnings season, we’ll concentrate on building on fresh and/or re- initiations of successful Q1 names off earnings and not worry so much about the big picture, ie,  TDSC  CRR  IPGP  MSTR  WTW TBL /  http://www.djimstocks.com/1st-q-2011/2011/4/5/djim-plays-1st-q-spx-1250-call-mcp-soda-tdsc-crr-ipgp-tbl-ms.html 

..and others like, GTLS SXCI SFLY WFMI ININ OPNT KEYN  (you can click highlighted symbol on site for charts)

NCH-new closing highs: WTW SFLY WYNN  MCP SINA  KEYN (Shadowlisted)

Update on Monday, April 18, 2011 at 09:47AM by Demi/ YourPersonalTrader

TITN , Titan Machinery, Inc.

blow out EPS, will get a look back to Ag' -equip sec', VMI strong EPS outlook last week.

ie LNN AGU POT MOS

SPX , approx.~1295 off SP downgrade news likely a buy.

DJIM #26 2011

It’s a pretty sad market state when the Q-end/month end/into a holiday weekend factor is about all ‘longs only’ have going for themselves heading into the week of June 27th.  On Friday, once again the market came up against, “Now the Hard part” premised during the week of not being able to hold gains as “austerity’ news’ was shrugged off as should have been done the previous day.  Any rally is a sell into strength and dip buying is elusive with only 200ma bringing out a few souls nibbling.

Now with a close below 1280 the Bulls have lost the agenda once more with an inevitable short term visit of Fukishma lows and likely new lows in the cards.  It may not happen this Q end week( if Greece does not provide any more shocks), but eventually it’s a summer necessity as lower prices may only change the dynamics of the present underlying market where buyers are non-existent.  

All in, a few positives from last week.  May Q end earnings had been quite robust early in the week (FDX,BBBY), but a few blow ups from US tech Thursday night and some European blow ups have turned the tide some making for a murky picture ahead.  This is not giving any clarity overall into what we’ll see from June end earnings which only start mid–July.   PMI flash numbers from China and Europe point to weak numbers for Global July 1 official announcements, but markets held up showing market expectations are likely baked in and it’s looking forward to the July numbers in August already.  The performance of Asian markets was the biggest positive, notably China as a soft landing was likely orchestrated.  Crude capping intervention was something we alluded to in DJIM#24 as a positive if it came and still see it that way now that it’s here for the markets as it will give some relief to the consumer. Just call it another stimulus. Now give us a tax repatriation holiday for some real ‘stocks’ stimulus!.  Another positive was R2K outperformance and this shows up in a few DJIM’s flirting with fresh highs, FTNT  QLIK  MSTR , including some of our consumer linked names noted last week.  Unfortunately, all of this is in the backseat, if not the trunk, as long as Greece (2 votes this week) and potential fallout is in the mix.

'Hope' rally

As been repeated for weeks, the market is a headline watching match for the fast traders.  At least this time it favoured trading to upside on what was really ‘empty’ macro headlines with some micro page turning.

It all started with Europe in the morning with some finance ministers ‘opinions’ (nothing more) raising optimism towards an agreement at the summit (July 20-21).  This enthusiasm was surely to be curbed by Merkel’s comments at the US market open, but market stayed giddy with Housing sale # surprise . In the afternoon another upside leg ensued as “Gang of 6’ debt ceiling proposal made the rounds. Once again, empty headlines with nothing concrete and possibly just more proposals amounting to nothing as usual.  All in, market ran on Macro ‘hope’, but likely rekindled some on earnings follow through from IBM, WYNN last night into the morning with PII,HOGS (disc. spending),OMC,KO and Hermes in Europe. 

In all, nothing macro resolved, but market tested the important 1295 successfully and it coincided with a better earnings picture emerging pushing market back over 20ma benchmark.  It’s too early to draw conclusions on earnings and/or turning away from political ‘macro’, but a rally is a rally and we’ll take it. Another hope is that many were flat footed today and come out to chase despite uncertainty abound. Remember, first leg is always short covering, especially as seen in SOX components today after just hitting fresh lows.

Shadowlist

Consumer - As alerted in morning for TIF FOSL LULU UA  all NCH’s, Hermes earnings put bid on high end, Adidas comments and potential end to NFL strike helped out UA. 

Earnings Q3 linked-   WYNN  post earnings succumbed to profit taking in regular trading hours, but it’s not going off list and will be a buy again.  This sell off possibility was noted to watch following EDU.  PII  added late June at 109 before running 11% to $122, once again put in a very healthy Q   (SHS  ran up as high 23%. Since pulled back, so keep eye out for EPS date).  http://www.djimstocks.com/djim-journal-1h-2011/a-few-names-to-list-into-q3piishsplcm.html.

IBM big catalyst earnings put bid on Mega caps, but also software Shadowlisted CRM  MSTR  to NCHs.

AMC, FTNT, RVBD  demonstrated high beta stocks ran or are running into earnings calls and if expectations are not handily beaten, you’ll be slapped down.