Ahead of the open, (18-1)

The positive sentiment from China’s >4% market surge, Europe’s up sessions since Monday carried the bullish tone into the first U.S market open of the week.  The circumstances were somewhat reminiscent of the Global melt up that US markets jumped on to start the year, maybe that’s why all disappointment with the market inability to break and hold SP 1300 resistance level today.  Just like upbeat Global PMIs’ to kick off the year, today’s eco data was upbeat from ‘better than expected’, China (PI, retail#’s) to a much better German ZEW confidence # to a solid U.S empire #.

The ones complaining on days like this, where the SP adds 45bps to 1294 are generally those who are still questioning the broad rally, not only January’s but the >20% run since October.  These traders/investors are the same ones who want a dip to buy and enter the market.  This relates directly to the Financial sector, which is down a second straight day signalling to many the rally has petered out.  How about just a breather?.  As said yesterday and now today, the pullback doesn’t take recent trade upward bias off the table.  In all, consider that despite consecutive down days in financials, the market is flirting with highs not seen for months.

Earnings- A possible weight is the start Q4EPS as 35% of SP 500 has reported negative surprises, but, so far it’s a small pot of only ~35 co’s.  

• CHKP  solid earnings are a positive to a peer covered here like FIRE FTNT.  Semi earnings are coming in and are overall upbeat (LLTC ASML) for the SOX .  LLTC, management said Dec bookings strengthened and its continuing into January.  Remember it’s what they say on the outlook this Q.

Ahead of the open, (01-02)

The month end window dressing/ FX hedge rebalancing-allocation chop trade continued with SP 1306 holding to create a close in the recent mid -range of the SP.  The low volume trade may not be notable, but the ‘unsatisfactory conditions’ noted in the FOMC grew from today’s economic data.  Since, (late last week), noted weak housing # GDP #,  today Case Shiller, Chi PMI fell short of short of expectations demonstrating some momentum is waning.  The idea of FED embarking on QE solely on weak numbers at this point is a somewhat careless trade.  This seems to be occurring as market shrugs off the data and holds 20MA.

These recent U.S numbers bring into focus what sparked the rally at the beginning of the year.(Dec.Global PMI’s, inc. U.S' ISM).  Those PMI’s set off the first trade of the year with Coals, Metals, Steels, Ferts’ all up 10-15% in January’....”Commodity linked stocks will be the beneficiary”.   The bar has been set leading into January’s data and it might be a touch high.  So far overnight, China PMI at 50.5 beat expectations and Europe’s was pretty well in-line with ‘flash’ data last week, the ES has spiked 10pts overnight with Europe rallying.  If the PMI’s are the sole reason for the spike, it may be short lived with US data coming up given recent data points.  Shanghai was still down 1% despite their number and downside risk in place if US (ISM, construction spending, ADP) doesn’t live up to expectations and/or the +10pt ES move.

• On the earnings front, two familiar names here came in solid (AZPN FTNT)

Ahead of the open, (10-02)

Anyone expecting a ‘supposed’ Greece agreement to be a market mover was disappointed. Anyone expecting ECB to hint on long term liquidity operations was marginally disappointed as well; Draghi kept it all under his vest, but you’d do the same not to screw up demand for the 36month LTRO on 02/29, (so, it’s not really a surprise).  In all, Draghi was more positive on associated Eurozone risks, which could have been good enough for the market sentiment now, but it wasn’t.  Only thing to materialize was more of the same as another morning dip was bought, swinging the SP a few points above previous days close.(Can you say.. all AAPL!).  Tape gets thinner as R2K slightly underperforms again and in this view CSCO demonstrated the fatigue angle noted to watch off earnings yesterday.  Last week’s note of high expectations bar set: eco’/earnings/ Eurozone possibly being priced in reared its head today with Initial claims/ CSCO/ Greece/ECB being the role players.

Still, although the tape is seemingly going sideways, it’s really gliding and can move into SP1370 this month after hitting our 1350’s target on a breakout from 1327.  The market may have hit July ’11 highs today and a few other possible technical points are inches away for resistance, (but, feels in many ways like it did preceding last week’s breakout, including the negative feeling tired).  Considering the magnitude of the technical breakout that followed last week, which includes many other factors beyond ’07-’10 trend-line break (ie, #of new highs noted) confirming the move, it wouldn’t surprise to tack on more SP points down the road,(Bernanke may/may not help some Friday?).  All in, due to the factors noted above, it just may take more than the very shallow dips we’ve seen this week for this to occur.

Software gave tech/ Nasdaq a bid off the TLEO deal (SABA >6%) and AKAM earnings. Aided softies FTNT FIRE CVLT  here to fresh highs.

In all, stocks Shadowed’ prior to July crash are once again reporting excellent results. (latest ie. RL  WFM  V.)  Also, names like AKAM  have been rebooted by earnings after falling off the list early last year.

Ahead of the open, (14-02)

Market simply reverted back to its 2012 ‘in the game’ ways.  If the investor doesn’t hold overnight, the investor misses on most of the day’s rally as it’s usually all in the morning gap.  If one doesn’t buy the shallow dips, one misses more opportunities to be ‘in the game’.  Although momentum always stalls after gaps, the market feels like SP 1370’s has a magnet attached to it pulling stocks back up from very shallow dips.

As the market retraced all it’s losses from Friday, you have ask what all the noise was about on Friday.  The austerity package passed this weekend as speculated.  All the Euro group wanted on Friday was for this occur to kick off negotiations.  All in, the noise will likely pick up with ‘negotiations’ as soon as Wednesday (finance ministers meet) and last till late (redemption date) March!.

As far as the underlying sectors, all the right groups led on the upside and single stock action from earnings related names this Q continues to be favorable with many new names hitting fresh highs. Names noted include:

...TDG, HAR, TRMB, THO… (IACI AZPN  FTNT FIRE  LQDT  MKSI  N PMTC  URI  LULU etc.),  while other names just confirmed they should remain on the list for yet another year, if this Q’s # is any indication, ie: (WYNN  LVS  PII  FFIV  FOSL  UA  CRM  MA DDD OTEX etc.)

Ahead of the open, (02-03)

After an eye opening commodity slide Wednesday morning, all the market needed was a good night’s dream about buying the good ole’ dip.   Of course, it wasn’t all that, but when you’re an investor/trader confused about ‘free money’ awash in the markets vs. economic growth dilemma going forward, hey just buy the dip and move on!.   The above question will linger on; can markets live with one and not the other and/or how much of each is sufficient to keep markets rolling.   This should be enough to drive one crazy with over analysis in the weeks to come.  In this view,  …”Overall, accommodative policy is still very much in place”…and economic growth is sufficient enough at this point, so not going to fret over it.  Sort of like the premise here for months of being cognizant of European headlines, but don’t let it keep you away from equities.

An interesting reaction to eco' data today. As said for days, economic ‘better than expected’ has probably had its day in the short term.  Besides the Initial claims today, (whose 4 week average has dropped by a significant 20K since the end of January), other data in the US is coming in softer this week.  Yes, the US ISM was a surprise considering almost all regionals were strong in February.  Durable goods, real consumption were softer too, yet market tried to hit fresh highs intraday signifying a belief by investors of the recovery holding.  Recall, noted earlier Global PMI gains would need to be consolidated following last ‘flash PMI’s and that’s what it looks like has happened again, here and abroad…. “… It (PMI’s) won’t be enough to buoy the markets, but aren’t a concern as last month’s jump needs to be digested….” Feb 22.  All in, it looks like it’s all about ‘Jobs, Jobs’ into March 9 allowing ‘softer’ data to be a blip for now.  Today’s tape almost going back to yesterday’s highs intraday is almost a disappointment as chance for a shallow pullback to buy into NFP# was short lived as Bears were unable to stir things up for longer than an hour or two. (after no promises of morphine and what could have been construed as disappointing data today.)  Instead, a potentially robust NFP# becomes the focus giving little chance to a pullback beforehand now and instead likely more upside risk.

Overall, the day started very encouragingly. Transports continued the reversal noted last week, single stock action in the RUT was very good with many names followed hitting fresh 2012 highs or flirting with such on 3-5% gains, which have become a rarity… ie.WYNN PII LULU UA IACI FOSL LVS FTNT and outside the group the momo/earnings, GS JPM might be prelude to more upside ahead in the Financials.  This is the kind of action you like to see and the type we’ve been waiting for as discussed lately. (including disappointing RUT vs. SP performance of late.)  Unfortunately, RUT gave up 10pts after 2pm and ended up lagging once again, while SP, NASDAQ managed to keep gains.  Still, as long as closely followed stocks here perform, the mixed signals even in the RUT are better ignored.