Into the trading week, (Apr. 23- )

The week long whipsaw being called a Bull/ Bear battle is a little extreme considering neither side has conviction to put money where their mouths are.  In this view, it’s more of a standoff than a battle as investors keep watch from a distance.  One result of the recent action is chartists, mostly Bear ones have come out in numbers with their Bear wedges, Bear flags now to give the week/ month long action some color.  If some market direction occurs soon, they will say it was in the charts.  But, the real culprit will always turn out to be a catalytic event and we’re coming into a few weeks of possible triggers for such.

To sum up last week’s action, it’s surprising the SP was actually able to muster a gain as the tape had reason to be ‘heavy’.  The lingering Euro’ debt crisis , ‘light’ eco’ data (notably, Initial claims #) , toss in noise “crumbles’ about AAPL nearly testing its 50Ma for the first time in 4 months and festering noise of a repeat of 2011 action as we come into the cyclical ‘sell in May’ buzz.  The negativity was offset by the ‘calming' earnings.  As discussed recently, market will know trends quickly off earnings and that’s the case now with important names in each important sector out of the way.  Best gauges are out of the way and Q1 is positive considering the weak global growth hand dealt.

On deck this week,

Initial claims, this may turn out to be the vital market puzzle piece this week (post 2 light weeks of numbers). Earnings will not overshadow eco’ data as they did last week.  Now, eco’ data has to compliment the earnings.  If  I’C’ #  number keeps on trending up to 400k it will invoke fear of a weakening labor market.  NFP# is a few weeks away and this Initial claims is last for April’s NFP#. 

FOMC,  market will look for changes in the growth rhetoric due to the recent eco’ data, specifically last NFP and Initial claims. Also, economic, rate tightening forecasts are on tap.  Policy will most likely be reaffirmed.

Earnings, it becomes a single stock story as major trends known. Still, one sector really interested in is the ‘retail’ luxury/ growth space to see if momentum is continuing. (COH reports, early March it was quite positive).  Of course, AAPL is on Tues. Last week, closely followed here, URI  PII VMW  FFIV  UA  were viewed positively. Add MLNX  to list off report last week.

China, China who?.  Now that we’ve escaped ‘hard landing’ again , Shang’ the best market in April.  Flash PMI’s early this week. Recall discrepancy between these HSBC #’s vs, gov’t.

Europe, Besides EU flash PMI’s, it’s a quiet schedule of events with politics taking over with May 6 elections in France/Greece. 

Ahead of the open, 19-07

Market continues its bounce to post EZ Summit highs as micro outduels the macro.  Incidentally, the words ECB, EU summits, sov’ yields…..have not been appeared on these pages since the move from July 13 lows began.  Hopefully this reference to EZ doesn’t jinx things!.  The trough to peak move of over ~45 SP has been off earnings, but also because of the quietness in the EZ.

As far as earnings..

A few faults noted last week and yesterday (lagging higher beta ‘growth’/ SOX) reversed today off the notable INTC report, while missing and lowering guidance INTC traded up 3% and led the SOX to bounce 3% after it hit multi month lows yesterday.  INTC was called notable here prior to report because of the numerous pre-announcements in the sector.  INTC relates and falls into the catagory…“..the turning point for the market will be when bad reports start to turn and go ‘green’.  EMC QCOM  fall into this premise as well.   Bad reports this Q are any that simply don’t beat the watered down consensus estimates already in place.

The other sector causing recent concern was the industrials, especially since CMI’s warnings.  Today HON, GWW  had better than expected earnings.

The third type of report was just a pure good old fashion beating with VMW up 10%, (which helped all the higher beta software, cloud types today)....

..and MLNX  (up 40%) after hours showcased.. ..”A silver lining in the approach, “Sitting back and waiting for ‘surprise outlook’ earning report from single stocks”… is these stocks will likely be handsomely rewarded as traders look for any signs of corporate ‘growth’ life. 

As noted to start the week following good enough bank earnings,…” All of the above factors are elements of a dead cat bounce unless the heavy loaded earnings week ahead is greeted with the same ‘good enough’ sentiment”…is playing out!.   A dead cat bounce has turned into more due to earnings reactions, but the truth still lies in getting over post-summit highs.  The combination of good enough earnings trend seen and quietness in EZ needs to stay on track for this to occur and escape the range binding summer.

Ahead of the open, (20-07)

EZ summit highs were penetrated in the morning, rinsed back before finishing right on the SPY swing high from early July.  All in, an interesting day.  Why?.  Although small cap RUT was the only red finish amongst the indices many of our ‘higher beta’ Shadowed growth stocks outperformed substantially.  This smells of rotation, but at this point it’s just a lot of covering in tech linked stocks.(SOX up nearly 6% off lows).  Still, its possibly enough to reach SP1400 as long as bad eco’ data is ignored (Existing home sales -5% vs +1% expectation, Phily Fed today) and EZ stays quiet.  Financials stepping up would enhance the possibilities of a higher SP price.

  

MLNX  significant growth outlook followed up VMW slightly positive report to lead tech linked stocks , VFC  earnings led ‘retail’ growth names..(RL, COH, FOSL +5%).  FCX’s helped base metal linked stocks.  Other single stocks closings, BSFT +7%, YELP, LVS, GWRE +5%, FFIV WPRT, LNKD, LULU, CRM,  WYNN,  BIDU >3%.  FFIV  weak guidance is another example in tech/internet where…”Bad reports this Q are any that simply don’t beat the watered down consensus estimates”.  The stock climbed $10 off printed lows.  These reactions are especially prominant in tech, which ranks as the most beaten down sector recently as far as sentiment is concerned.