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Entries in ILMN (4)


...slowly but surely

..the market crawls methodically for 1131 retest

We can wrap the today’s market by repeating yesterday’s first paragraph as the context remains the same.   Overall,  simply buyers on fence and shorts not eager to press on with new positions.Market sticks to tight range showing more signs of resiliency as buyers show up to buy dip blips off anything that can be construed as possible bad news. (*China Stress tests (housing)- Commods bought up after headline pressured them.   Still, this may get more attention as the belief recently was the China gov't would be "relaxing" things.    Also, the discrepancy in the steel uptick end of July vs. X's and other steel co's guidance not resolved.   Leaning on the X  side as to what might be occuring going forward.

Overshadowing a broad tight range market was the outperformance of DJIM’s Q stocks as traders buy the earnings.  Recently mentioned, EXPD  led the charge ( last week noted as long as transports stay intact the market would be fine) with VMW, ILMN CLW  hitting new highs since releases.


..underlying stocks again

Oh, those shorts, who tried to press the issue of a Bull ‘blown oppy’  yesterday were rudely (once again) beaten by the ‘resiliency’ of this market as it bounced fast off the opening bell SPX 1178 touch(off ~20 points since Monday’s fresh high).  

They were broken by using the old adage of a stronger USD/weaker Euro = lower equity prices,  ignoring what was pointed out recently here that rotation from TSY’s was going to happen as QE2 expectations gets priced in.  (see DJIM #42...“..but still equities did not sell off on the higher USD, This could be because rotation/liquidity into stocks from Treasuries is the natural course…and market remains steady because individual groups get enough liquidity to sustain it. ).   This was overwhelming theme today as 10yr TSY’s made a big move crossing a trendline at 2.65% from April, while USD got a bid, but  the market ‘surprisingly’ to the Bears did not drop.   This is quite positive to hold up as we did.
As noted,  fixate on individual stocks and not the stalling market for oppy’s to trade.  So, while the SPX traded in a very narrow band after 10am, our DJIM listed stocks, including some bolded  yesterday added strong follow through.   Notably, RIMM  powered to a 10% intraday H, our little MOTR, motored another 15% before running out of the 9ema play, right back down the hill.   BID >3% and MCP  to a NCH.   BIDU, NFLX, post -EPS were making fresh NCH‘s.  The clouds-virts were strong with RVBD, FTNT extending post earnings gains as well.  The group was also helped by CML  retaining advisors for a possible sale (v.nice earnings AMC was a no brainer, if you announce such a deal possibly in the making hours before). AMC,   FFIV,EQIX  helped out the group some more.  The premise here that there is room to run after a gap off earnings was shown  again today in MIPS ( it’s another stock that has been mentioned in M&A discussions).   Also, note if the market gets into any defensive rotation soon LIFE, ILMN  are two strong earnings today to go to,  probably even right away tomorrow. 

Clearly, if you want to outperform now, it’s primarily selective earnings stocks we should be driving as broad market’s uncertainty is abound around next week’s catalysts .

Oct282010 can taste the difference

As the broad markets tumbled with enthusiasm dampened for QE all the way to SPX1173, (WSJ says the Fed will “unveil a program of Treasury bond purchases worth a few hundred billion dollars” over “several months”, the Fed is opting for a more measured approach vs. the initial “shock and awe” of QE1),  DJIM traders should have hardly noticed, if following the premise layed out all week of fixating selective individual equities (earnings) vs. broad markets goings on.   

Yesterday, the lead into the trading consisted of 5 EPS linked stocks (CML (the highlight ,+30%), FFIV, ILMN, LIFE, EQIX) from the previous AMC.  As noted, EPS stocks ‘have room to run’ after gaps premkt and/or post opening bell.  Again this aspect pointed out early in the week worked again, notably with CML and FFIV, ILMN.   Another on AMC off our list, LVS  showed there is room to trade to higher after the initial bump off earnings.  As far as the overall Virt-cloud/M&A gang shooting higher, remember this note following the huge sell off in the space.."To put this 'cloudy' day into perspective, ask one question.  Do shorts or the acquiring executives at IBM, HPQ DELL, CSCO know better???.   Easy answer, cloud is the only growth shift going on, besides anything smartphone related.  One good report, one acquisition and it will be sunny and not cloudy days in the forecast".

This EPS has seen over 80% of reports beating expectations, but the macro/QE2/ FX trade is the number one issue today.   Once again the early foucs was USD was stronger/ Euro weaker and the bond sell off continuing.    By end of day,  maybe some are finally getting drift that a strong USD/weaker Euro does not necessarily mean lower equity prices and that there is actually an allocation shift from TSY to equities to sustain the market as alluded to earlier this month as a possibility.   This last minute Briefingcom day trader headline shows the bewilderment, a little too late for those shorts who tried to press the issue again early, only to be squeezed out again by the ‘resiliency.’ of this market…“Squeeze off the lows continues as we approach the close..The dollar is off its highs, but its pullback has not nearly been of the same magnitude as the bounce in stocks”.

What’s interesting now stems from what was noted here following the beige book which showed eco’ is getting better.   Since, we’ve had some more good data points, including China/UK GDP numbers, better than expected earnings that is showing things are ‘stabilzatizing’  here and globally and thus QE2 is becoming less relevant in the size scope the market wanted days/weeks ago.   The expectation today should be what ‘Bernanke’ likely leaked to WSJ to cool the enthusiasm beforehand and just maybe the equity market is not about to sell off on the news like the Bond market has judging by the reversal today.   The more pressing issue for the broad indexes is the signs of tiredness at SPX1180’s for what seems like all of October now.   All in all,  this should not matter to how we all go about trading the market day to day with the noise getting more nauseating as we get closer to FOMC date.  We can avoid this noise and not throwing up over ourselves and our accounts in case of a sell- off by staying selective in stock picking and by switching those names/taking profits as new oppy’s come up.  

*Again you can follow additions to our Shadowlist by visiting the on site 'Playpen'.


Subdued is just fine..

It’s going to take more than some short term USD momentum and European peripheries fragility back on the table to swing this market downwards.  It might’ve been good for ~5-6 SPX points to the downside early, but it was hardly selling pressure before the dip buying began.   Even with continued strength in USD, the commodity linked groups performed well.   Also, the Super-Fins’ discussed late last week as a possible catalyst for higher prices into year end did nothing to dispel this idea.

Market moving catalysts will continue to be sparse this week with US earnings wound down (but, European EPS starting, which may provide more strength for markets),  little eco data, so pullbacks should remain shallow with buyers showing up on the weakness.   

In this subdued trading environment, you’re going to see different groups leading for the day and on any given day different  names off Shadowlisted plays hitting new intraday eg. SOHU MOTR ILMN HLF WYNN SPRD.