Before the Open (Oct 10)

Good morning. Happy Thursday.
The Asian/Pacific markets closed mixed. China dropped about 1%; Indonesia, Japan and Singapore did well. Europe is currently up across the board. Austria, France, Germany, Amsterdam, Spain, Italy, Stockholm and London are all up more than 1%. Futures here in the States point towards a big gap up open for the cash market.

The dollar is flat. Oil and copper are up. Gold is down, silver is up.
News from Washington is there may be a short-term increase in the US’s borrowing limit. This is the best sign we’ve gotten since the partial government shutdown began that both sides were serious about sitting down and agreeing on a budget. S&P futures are up 15. Coupled with yesterday’s bounce, the S&P will be about 24 points off yesterday’s low at today’s open.
What can I say? The recent market has been great for day trading, but swing trading has been difficult because moves have not had staying power. Holding short came with higher risk than normal because on any day an agreement could be reached in Washington, and stocks could immediately surge. Holding long of course was just not wise because the near term trend has been down for about three weeks. When the market is held hostage to news and could potential move quickly in either direction, you have to change your style or risk getting beaten up.
As of now there aren’t many stocks on the trading lists. Makes sense because I’m not going to advise traders to be careful and then turn around and fill up the lists with average set ups.
A budget has not been agreed on. We could get additional good news (they’re getting closer to reaching an agreement) or bad news (the sides are far apart and breaking off talks), so it’s not party time yet. Two things have to happen to clear the trading air. 1) Washington must agree on a budget and debt ceiling. 2) Wall St. must react. The first move no doubt will be up, but there’s no guarantee the first knee-jerk reaction will be the one that carries the market for the following couple weeks.
I’d continue to play it safe.
Stock headlines from barchart.com…
Office Depot (ODP +1.73%) was upgraded to “Buy” from “Neutral” at Janney Capital.
Capital One (COF +0.40%) was upgraded to “Buy” from “Neutral” at Guggenheim.
Hewlett-Packard (HPQ +8.92%) was upgraded to “Sector Perform” from “Underperform” at RBC Capital.
Discover (DFS +0.39%) was upgraded to “Buy” from “Neutral” at Citigroup.
Franklin Resources reported a 12.4% passive stake in Sagent Pharmaceuticals (SGNT +0.05%) .
Tiffany (TIF -1.14%) was upgraded to “Buy” from “Neutral” at Sterne Agee.
Citrix Systems (CTXS -1.41%) dropped over 11% in after-hours trading after it lowered guidance on Q3 EPS view to 68 cents-69 cents from 72 cents-73 cents, below consensus of 73 cents.
Gabelli reported a 20.15% stake in Strattec Security (STRT +1.43%) .
Ruby Tuesday (RT +4.28%) slumped 11% in after-hours trading after it reported a Q1 EPS loss of -37 cents, much bigger than consensus of -5 cents.
Check Point (CHKP -0.96%) was upgraded to “Outperform” from “Market Perform” at Cowen.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
Chain Store Sales
8:30 Initial Jobless Claims
8:30 Import/Export Prices
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
2:00 PM Treasury Budget
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today’s open: LNN, IGTE, VAC
Notable earnings after today’s close: MU, SWY, ANGO, OZRK
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers