..underlying stocks

Today might be looked on as a blown oppy’ for the broad market after it closed near the low’s on the heels of the risk trade put back on globally, following weekends go ahead to weaken the USD.  U.S market’s couldn’t carry what was put in other markets globally off the G20.   Add some M&A activity, decent eco’ data here and you see,  it just doesn’t really matter now to the broad market ahead of the early November catalysts.  So, instead,  let's decipher broad market from individual stocks.  The underlying stock tape is where there’s light and life.

As pointed out yesterday, the reactions of individual equities is something that can keep us traders busy while market stalls and today was a good follow through/ confirmation on this front.  This falls into DJIM’s trading methodology, instead of the ETF trade that has been ongoing.   First, we had commodity linked stocks here like eg. FCX/WLT  do the sector rotate game off the FX game.  Secondly, it was  pointed out that earnings are getting a good reaction and today SOHU  was a prime example…traded low $70’s premarket after EPS and made it up to $76’s intraday, exactly what was pointed out post FTNT/ RVBD, stocks still have leg room to move after gap ups.  BIDU/SOHU's  results are also helping the China stocks move, so we have more individual names moving within a group.

Also,  the Virts’clouds extended off the RVBD/FTNT  reports with CRM, FFIV SVVS RDWR  having good days with RDWR earnings helping/ and M&A noise coming back into the group as well.   Also, you`re seeing some individual names  go without catalysts like BID (alerted Sept 27) at $35 hit about $42, MA,   (alerted Sept 16, $210 hit $248 (both >20% since) made fresh highs and fresh names like MOTR  got a Cramer fix supposedly and ran another ~15% to $20.70H , KH  made an early intraday H/ NCH.  PCLN  running off and with good ole`TZOO  earnings.   Geez, even RIMM  made a new high since added back to list (Sept 21).   Simply, there is plenty to trade off the Shadowlist, while 'broad'  market still struggles with SPX ~1180’s. 

In the end, you can’t expect the market to do much as a whole before next weeks FOMC/Elections, so don’t worry about it.   Just fixate on individual stocks as this trade has come back for now.  Nothing broke out today like USD to new lows, Euro, Gold to new highs, so nothing has changed to give this broad market a shot in the arm. 

just drifting ..

The writing was on the wall (last hour selling) from the onset of trading.

• Pretty broad strength globally, Shang +>3%, Europe >.7%, anything commodities/mining (no tax hike relief), nicely up and ES was ‘flat’  in the US premarket.  Despite, a 5 pt SPX midday gain the US lag was still in effect coming to 3pm.
• After the opening bell, a big laggard was easily visible in the leading group since early Sept .(SOX>30%)
• Momo/winners of 2010.  Last week noted single stock strength was disappearing in momo/growth names to the years laggards. This profit taking (not severe yet, but something we said to watch), continued today as seen in the NFLX, PCLN, CRM, Casino’s etc.  BBY earnings on deck in morning for tech group.
• Only a handful, incl DJIM’ commodity linked plays (CLF FCX ) up 3-4pts midday were outperforming on the  ‘hike relief’.  The single stocks action wasn’t widespread as you’d like to see considering the inflation trade coming back on and the weak USD.

In all…not putting much into the day just yet, as the ‘seasonal trade’ allows for moments of easy downside whenever buying dries up (lack of liquidity).   A little selling with no bids on the board allows for exaggerated  moves like today’s last hour.   Considering  there was no news and a technical “R” in the 1246/1247 , (a couple H&S are in this zone),  it’s more of a case of buyers losing their cars at the malls lots after some lunch hour shopping and not making it back to their desks or just a case of not even getting out of bed.