Before the Open (Jun 24)

Posted on by Jason Leavitt

Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed mostly down. China dropped a whopping 5.3%; Australia, Hong Kong, India, Indonesia, Malaysia, Japan, Singapore and South Korea posted losses greater than 1%. Europe is currently mostly down. Greece is down 6.1%, Belgium 4.8%, Austria 3.5%, the Czech Republic 3.2%, and France, Germany, Amsterdam, Norway, Stockholm, Italy, Spain and London more than 1%. Futures here in the States point towards a big gap down for the cash market.

The dollar is up. Oil and copper are down. Gold and silver are down.
A lot of technical damage was done last week. The path of least resistance is now down. My target for the S&P is the low 1500’s. I think it’s silly to pick an exact number…just knowing my target is almost 100 points below Friday’s close is good enough.
From a technical standpoint, the market is broken. But last week’s selling was news induced, and the news can change. Bernanke himself can come out and say the public misinterpreted his statements or several dovish Fed governors can come out and clarify nothing has changed…and that tapering will only take place if the economy continues to improve, which is not guaranteed right now.
I’ve had a defensive posture for a couple weeks and have advised to play it safe…to keep trades shorter term and to not take big chances. This attitude has served us well. The market was range bound…it lacked a near term direction…it was gapping a lot…it was swinging wildly and experienced many sudden reversals. I couldn’t say for sure if the market was consolidating for another leg up or putting a top in place, but the charts did tell us to be more cautious.
Now the path of least resistance is down…but in most cases it’s too late to go short. We need a bounce to take bearish positions. I hope we get it. My fear is the market just collapses without giving us a second chance to get short. For now I’ll just day trade the futures until the market bounces.
Here are stock-specific headlines from barcharts.com…
Walgreens (WAG +0.77%) was downgraded to “Hold” from “Buy” at Cantor.
JPMorgan raised its price target for Google (GOOG -0.43%) shares to $1,025 from $860 citing increased confidence in search pricing and continued momentum for YouTube.
Reuters reported that more U.S. senators are raising concerns about a Chinese company’s plan to buy U.S. pork company Smithfield Foods, particularly in light of restrictions that China continues to place on imports of U.S. meats.
The WSJ reported that Disney (DIS +1.21%) and Sony Pictures Entertainment (SNE +1.70%) are testing a business model in South Korea to rent movies through video on demand while they are still playing in theaters.
Politico reports that Republicans in various states around the country are split on the Internet sales tax bill being considered by Congress.
PVH Corp. (PVH +0.57%) was upgraded to “Overweight” from “Neutral” at Piper Jaffray who raised their price target on the stock to $141 from $124.
CBOE Holdings (CBOE +0.07%) was upgraded to “Buy” from “Neutral” at Goldman with a price target of $47.
The U.S. Food and Drug Administration expanded the approved use of Theravance’s (THRX +10.20%) antibiotic Vibativ to treat patients with hospital-acquired and ventilator-associated bacterial pneumonia caused by Staphylococcus aureus.
GlobalScape (GSB unch) announced that the U.S. Army has exercised year one of a two-year option contract to continue Globalscape’s support for the Standard Army Maintenance System-Enhanced logistics program. The option year is worth $1.45 million and will yield in excess of $360,000 of revenue per quarter.
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Jun 24)”

  1. Hi, Jase,
    Do you never ever admit you are WRONG. I’ve followed your comments and your daily wraps during my $15/month freebie and you were clearly, unequivocally, straightforqward
    BULLSIH. Yes, oh yes, you did say, be careful, trade carefully, be cautious, etc. but you were quite clearly and unmistakably BULLISH.
    Why can’t you simply – just once – admit that you were WRONG. All your followers – every single one – they all know it so you don’t gain any points by trying to tough it out.
    Just say – once – I was wrong. It would clear the air and give you a lot more credibility.
    Just a word of advice – even if you did censor my last comment!!
    Regards,
    Richard

    1. Richard…I nailed this year perfectly. I was long during the entire move up and then shifted to a more cautious stance when it topped. In hindsight I don’t think I could have realistically done better. You on the other hand are a permabear, and with the indexes making multi-year highs or all-time highs last month, you’re pissed off. You are so bearish, you packed your bags and moved out of the country. You hate me because I’ve been long during a phenomenal bull run, and you’ve been short and have gotten crushed time and again.
      You are the one that’s wrong. I’ve never heard of someone who lived on beach in southern Florida pack his bags and move out of the country.
      Admit it…you hate me, you hate the United States and you especially hate the fact that the market trend has been up for many years.

  2. Neal you are permitted to state your opinion, but you are not permitted to spread false claims. I nailed the entire move up and then shifted to a conservative mode when the market topped. Simple as that. I nailed it perfectly. Did I miss some downside? Yes. When the market experiences one of the greatest rallies in history, I’m going to miss the first move down, and I have no problem with that. The only people who can accurately pick tops are the one that guess wrong over and over.

  5. in defence of Jason,Jasons style is more of a longer term swing trader–i think
    –that gives you more time to close longs asuming u got long early
    Jason whilst still bullish has been warning to be cautious and only short term trade new positions–i would say Jasons long term trendline was broken friday
    we are currently bottom fishing for a low to a range for a toping process and 1500 is also my bottom line and can be anywhere from here or 1550 to 1500
    its easy to be misunderstood when writing these things as perple take what they want to hear
    lucily im to crazy to write a newsletter and my mind set and personality suits only a a daytrader
    just closed out my shorts taken at begining of asian trade today
    and am watching my longs go up on the charts as i write this
    but need to be carefull with the longs as short term trend definitly down and i dont see a capitulation down yet

  7. Actually, I follow Jason and his record is above average. My forecast for this move down to the 200 day MA is better, and I have been making a good return. But, I am not a trader, but an opportunist.
    As for Richard, I do not know him, but he probably did move out of the US (The vengeful hate themselves the most) and for that we should be thankful. Finally, I think that China will be the big news this year: final collapse. Think FXP. The sailing off of Hawaii is good this year. But fewer boats in the local races. Thinking of you Richard, wherever you are, hope it hurts.

Leave a Reply