Cluster held..

Following 3 premature and/or botched bounces this week, the market finally found the ingredients to make a bounce last.   Why?.  Firstly, no sideline money coming back (‘No Rush’), secondly no shorts in the market to create a short covering rally of substance for those 3 earlier attempts!.   The combustion needed simply was not there, folks. Let’s get to this afternoon,  it wasn’t crudes fall as reported to ignite the move as it was falling all day off overnight $104’s and the market had done nothing except sell off more.   It was smacking 1295 SPX more than anything that set this move off. (see yesterday’s cluster note).  Afterwards > 2pm, crude fell more and that’s what got some more conviction buying / covering going.   Look at the Shadowlist (site attached) snapshot taken around 1:30 just before the market fell hard to 1295.  What do you see?... No selling in individual stocks on the Shadowlist and thus a ES sell trade.  This was not a list indicative of a market falling through Dow 12000/SPX 1300.  As the market dropped to SPX1295, our stocks didn’t budge in a seemingly panicky moment at major support.  Selling had clearly stalled this morning off Saudi Arabia sentiment of this contagion not spreading.

Looking ahead, the market broad following this afternoon is an 'Oily hostage' to the price of crude as it will dictate the broad market/SPX moves.  Likely finish the week below 20MA, so hardly out of the woods, but indvidual stocks/ sectors should have better sentiment/oppy's to trade after this weeks woodshed moments.

Shadowlist

• Momentum/earnings/“winners of ’10-   yesterday..”Hope is PCLN  EPS reaction AMC generates some buy interest on this pullback”. Clearly, this helped abate the selling and generated a bid in ’10 winners names like FFIV APKT RVBD, all >4-6% and ‘11’s  standouts like JNPR.
• Q4 earnings update – Another positive for market was the ‘v.good EPS reactions’ continuing as we had 3 DJIM stcoks report well, GTLS +>13%,  PCLN >6% , SXCI  $44 to 49’s , >6%,  all excel and produce nice runs in a selling market.  This again proves the premise of trading EPS reports this season and ignoring the broader market.

below: Intraday Shadowlist components

..Prove it

Following the early week slide, we noted…”Considering very good eco data is irrelevant as today showcased, anything more than a bounce into a probable good NFP# can’t be expected”.  Well, we might have to rethink the ‘irrelevant’ part following today’s ‘bounce’ right to this week’s highs,( if ) the whispers of 250k-300k jobs are hit or not!.  Will it bring conviction buying if hit or will we continue sideways trading going forward.  Guess we’ll see soon enough and so take it a step at a time.   Anyways as discussed yesterday again, a ‘bounce’ possibility existed thanks to the combination of a big sell off day w/ the chance crude would ease off following a big >2% day would generate optimism into the jobs #.  Truthfully, it might have generated a little too much optimism putting aside everything (crude >100, Libya, Saudi Arabia etc. ) for the day.

Shadowlist

• Q4 earnings update-  some of the best action was from this DJIM shadowlist sub group. TDSC >10%,OPNT >9%.  On the less volatile’safety’ side, SXCI, TBL  traded in NCH(new closing high) territory.
• Consumer- life coming back here today and maybe a good sign forward…WYNN (nch) and FOSL,UA,TBL 4-5% higher.
• Commodities –  many sources as per Briefingcom/CNBC all over ‘coal’ today. What took you so long?. CLF  tacked another ~4pts climbing back over $100. WLT,ANR  also put in ~4% days
• Momentum/earnings/“winners of ’10-   A few like RVBD  had decent gains, but overall still sloppy considering the huge rally as the NFLX,FFIV,CRM  hardly showed up.   Opticals were mixed, some like OPLK, FNSR, FN  performed ~4%.

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.