...EPS EPS

While the ES/SPY traders are mired in a tight ‘digestion’ range today, it is the strategy of focus on earnings linked stocks that provided most of the excitement.  Although some may see it as “R” at 1307’ish at work, it is also natural for the market to go through a digestion process after a big spike ahead of some potential catalysts ECB-Trichet, Bernanke , NFP #.   All in, it’s a wishy washy diagnosis for the broad market.  Tonight, judging by ES, market is turning a blind eye to Egypt and region, which could turn costly if too complacent.

Shadowlist

• Momentum/earnings/“winners of ‘10 –   last section update, APKT  was noted as one to watch off earnings and today it seemed to be the play of the day, but it wasn’t the only one as it took fellow DJIM’ BSFT  for a similar ride up to >20%.  Just like last Q post EQIX meltdown, earnings are once again stabilizing the sector along with M&A activity (TMRK and NAVI).  SMid caps are definitely having the best earnings reactions in the marketplace, even though the RUT is not making new highs.  QLIK , if you follow a narrow band of stocks per Shadowlist, you get a feel of a stocks habits.  In this case if volume comes, it’s usually signals a move pretty soon and that’s why it was alerted to watch.
• Commodities – All DJIM stock links to Ag/Coal/ steel are simply on cyclone watch worries.  CLF coming to new highs.
• Q4 earnings update –  AMC, SFLY  OTEX  strong reports.

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.

..may they all be like CRR, FTNT,SFLY,N!

A day of digestion as the market rests on support provided by a ‘positive’ earnings season and a FED that gives and gives.  Most of the incremental gains for the market today are due to managers going after the lagging groups  as is always the case.  Thus, leading sectors in the market today are the Black Sheep groups, while the Nasdaq lags.   This also relates to a note a few days ago…”.bring inflows from the sidelines due to technical (indicies potential breakout)..” . Combined, it is all ‘PA’, performance anxiety into month end.  If the breakout the other day isn’t enough, today the TRANS were making fresh highs, which garners support from the Dow Theory cult. 

Another quiet day tomorrow likely, next week as discussed we will find how long the market can rest on it’s laurels. (earnings / FED).  There is no sign of shorts in the market and it’s hard for the market to go much higher without them being around to get squeezed.  The market would need a lot of money to come in the market to offset their absence.  Maybe, eco data will wake them up next week and/or wake up complacent longs.  Recall, what we said about April PMI's (tagged) showing what March PMI's didn't ( post Japan/Crude price escalation). 

Considering, DJIM has always been an earnings/small cap orientated place,  we still have something to look for as R2K earnings take over from the mega caps.  If today is any indication from Shadowlist (tagged to locate) earning linked plays, we’ll have something to look forward to and initiate new stocks. CRR, initiated last Q at $110, hit $169 today, SFLY, also last Q addition at $40 to $67 today and FTNT  from August at $18 to $48.  All were  >15% pops today off another round of excellent earnings. Makes you wish you were just a buy and hold investor....

Update on Friday, April 29, 2011 at 02:36PM by Demi/ YourPersonalTrader

Nice earnings from small caps, QLIK  play here and others like ACOM (now at of hand), ARBA , but one we played as an IPO in software Netsuite is best, N, headline is nothing # special, but inside is great 'billings growth') and definitely an add to Shadowlist.