Good morning. Happy Friday.
The Asian/Pacific markets closed mostly down today. Japan dropped 2.4% and Indonesia 1.7%. There were no big winners. Europe is currently mixed. Austria is posting a decent gain; there are no big losers. Futures here in the States point towards a gap up open for the cash market.
The dollar is down. Oil and copper are up. Gold and silver are down.
Cyprus remains the headline news story. The country could not secure aid from Russia, so it’s back to the drawing board with the EU. A deal must be struck by Mar 25.
So far the market has done a very good job shaking off Cyprus, which is actually bad news for Cyprus. It means we don’t care, and if we don’t care, if we don’t think it going bankrupt will negatively affect us, they lose some of their negotiating posture. It’s hard to stand firm in your position or bluff if the world, and in particular the US, don’t seem overly concerned with the country going bankrupt.
That said, baring a big rally today, the S&P will post its biggest weekly loss since December, but the loss as of right now is less than 1% – no big deal.
Today I’m going to be mostly in management mode. Research over the last 24 hours tells me my bias should still be to the upside, but the quality and quantity of good set ups are not as high as one would expect for a strong market. The market needs a little more time to digest its gains and set itself up for another leg up. I would be very surprised if the S&P did not high a new all-time high.
Play the best set ups in the best groups. And then manage risk by playing good defense. More after the open.
headlines at Yahoo Finance
headlines at MarketWatch
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Mar 22)”
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Odds are the market will pull back. This rally is stale. If this gap up holds I will be surprised. The market is fairly priced but the bulls are a little to confident.
It may be the problems in the EU, Cyprus, are not of interest, but they should be. The EU is unlikely to find itself economically for months, if not years. The US exports 30% of its trade to the EU. Declines in the EU are restrictive of earnings in the US.
The FEX debacle suggests that internally US business is slowing. Most of the home sales increase is speculative and financed by the GSEs, which are bankrupt. Lot of reasons to be careful, the party so far is backed by the Fed, not fiscal policy. The US could find this a cold spring and even colder summer if Congress can not find a way to restrict spending and make a budget. I am betting it will not happen.
“If this gap up holds I will be surprised.”
Time to eat a little crow gentlemen.