thank..Jennifer Hudson's waistline..

..for WTW and/ or my recent TBL' (Earthkeepers) purchase to get through another winter!

Coming into the week we noted ‘inflation’ would be the key ‘word’ and it has proven to be as all the market noise is related it.  Everything else, including Iranian boats and some overnight ECB buying (fat finger?), the market is turning a blind eye to as we see by recent trading day's 'green' closes.  Note, if Journals do not contain mentions of eg. boats, Middle east tensions or whatever heading into a trading day as every other media outlet,  it’s because we’ve turned a blind eye to it and are trading away the Shadowlist components.

A simple question now is does the US /global have an inflation problem?.  Okay, if so, why are the emerging markets on fire this week (>3%)?.   Sure, they’ve have beaten up so far in ‘11, but you can beat them up more on inflation fears!.   Yesterday, FOMC related forecasts didn’t change (positive)   So, this is the noise, the fear mongering, but what do you do as a trader?.  Consider this…What if inflation points ease down the road, you’ll beat yourself for not using your cash this EPS season!. That's as simple as it gets.  What we’ve been saying this Q (if not years now) is trade the earnings stories/ rotations and ignore almost everything else.   

Shadowlist

• Q4 Earnings update-  Look at today’s ~40% pops, WTW TDSC TLB, (picked TBL to alert today, but you can add all 3 to Shadowlist for now).  These are almost historical earning reaction gaps and incredibly there is more follow through intraday (see IPGP  comments recently).

• Momentum/earnings/“winners of ’10-   While some momo’10 names notably lag today in a melting up market (maybe something to monitor for broader mkt),  this year’s inclusions  to DJIM consisting of opticals/ EPS’/ new potential momo’s carry on.  NPTN, FN  alerted here at ~ $14/ $25, respectively are near highs of $21/$32.   When you catch momo, you really catch it!.  Buyers who missed the ride earlier got on board of NVDA (up >10% from red lows), despite many bearish analyst comments.   AZPN  got a $22 price tgt.

..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 #11 2011

Due to the earthquake Friday, the markets were secondary and if not irrelevant.  As witnessed all weekend the implications and fallout will remain an unknown.  We started early last week talking of the volatility back in the market and it picked up steam in one of the worst days in the markets in months and lead to our early premise in late February of this playing out like out like November instead of another quick snapback… February 24th”..supports  fell quite easily and brings up the possibility of 50MA as buyers are in ‘No Rush’ as titled yesterday.  This dip is looking more like the November one to 50ma eventually instead of the January one.  Short term- Saudi Arabia is the wildcard noisemaker here, if this turmoil doesn't spread there, SPX 1295-1300 cluster of support may hold.”.   Unforunately, the market got a few unexpected wildcards (optical earnings induced slide, china import/export, US trade #’s & Earthquake to lessen the positive developments out of Saudi Arabia (non-event) by Friday.).  Heading into the week a ‘bleak mood’ will likely persist, but the market did defend the SPX 1294 level discussed and the sideways trade may continue if it continues to hold.

Shadowlist

• Commodities-   The fallout from earthquake to start was the ‘rebuilding ’ trade in steel  related names.  Another will likely be solar  due to the nuke issue at hand. (Barron's was positive on our 2 names TSL,FSLR  based on valuation). As far as China trade #’s, it is likely an aberration due to seasonal factors as January was extremely strong and February very weak.  A very possible wash in the end, but market is not drawing this conclusion yet and will likely wait till March’s # come out.
• Consumer-  Retailers in list acted okay and are near highs late last week, RL, FOSL(IBD50 addition) TBL etc.  SODA continues to trade well.
• Momentum/ earnings/ winners of ’10-   some better signs last few days as high growth names bounce ie. NFLX, FFIV.
• Financials-  early in the week talk of rotation into financials was discounted here (needed more than BAC meeting) and this proved right as once again they faltered.

..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.