Good morning. Happy Friday.
The Asian/Pacific markets closed up across-the-board. Australia, China, Hong Kong, Japan and South Korea each rallied more than 1%. Europe currently leans to the upside. Amsterdam, Switzerland and London are doing the best. Futures here in the States point towards a positive open for the cash market.
The dollar is down. Oil is down, copper up. Gold is up, silver down.
Yesterday was one of the market’s biggest up days of the year, and coupled with the previous day’s relatively long lower tail on its daily candle, the stage is set for a bottom to be put in place and a new uptrend to establish itself.
I was thinking we’d get a knee-jerk reaction to the upside when the Washington finally agreed on the debt ceiling and budget (it hasn’t happened yet) that would be followed by one more move down. Then a bottom could be put in place. Then the market could rally to new highs.
Given yesterday’s strength, I’m tempted to say if today is a decent day, there will be no test of the lows. A bottom is already in place, and new highs will be made later this year.
This is how I’m leaning right now (if today is an up day). We’ll find out in the next couple days how much staying power yesterday’s move has. It certainly is characteristic of a bottom…or how bottoms are formed. Tops take time; they tend to be rounded. Bottoms form in single days and typically don’t give you a second chance to get on board once the trains starts moving.
One thing that could keep a cap on things is the options market. There was huge call and put volume at SPY 168 yesterday. The stock closed at 169.17. If the market’s invisible hand doesn’t want those call buyers to make money on the weekly options which expire today, we won’t get a move up today.
Long term my bias remains on the long side…this hasn’t changed in a long time.
Short term…we’ll find out in the next couple days if the market intends on testing its low.
Stock headlines from barchart.com…
JPMorgan Chase (JPM +3.49%) reported Q3 EPS ex-items of $1.42, better than consensus of $1.19.
J.B. Hunt (JBHT +1.85%) was upgraded to “Buy” from “Neutral” at BofA/Merrill.
Deutsche Bank (DB +3.95%) was downgraded to “Underperform” from “Neutral” at Macquarie.
Johnson & Johnson (JNJ +2.12%) was upgraded to “Neutral” from “Sell” at Goldman.
BNP Paribas (BNPQY +3.48%) was upgraded to “Outperform” from “Neutral” and Societe Generale (SCGLY +3.86%) was upgraded to “Neutral” from “Underperform” at Macquarie.
Pharmacyclics (PCYC +2.16%) was upgraded to “Buy” from “Neutral” at Goldman.
Merck (MRK +0.47%) was downgraded to “Hold” from “Buy” and Eli Lilly (LLY +2.48%) was downgraded to “Underperform” from “Hold “at Jefferies.
Southeastern reported a 4.8% passive stake in Wendy’s (WEN +2.58%) .
Wells Fargo downgraded the Consumer Staples sector to “Underweight” from “Overweight” citing downward earnings momentum with U.S. consumer disposable income growth near 50-year lows and commodity prices on the verge of deflation.
Safeway (SWY +2.50%) reported Q3 EPS of 27 cents, well ahead of consensus of 16 cents, and said that it intends to exit the Chicago market, where it operates 72 Dominick’s stores, by early 2014.
Wells Fargo reported a 12.1% passive stake in Pike Electric (PIKE +3.18%) .
Micron (MU +1.54%) reported Q4 EPS ex-gains of 20 cents, below consensus of 25 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Producer Price Index
8:30 Retail Sales
9:55 Reuters/UofM Consumer Sentiment
10:00 Business Inventories
Notable earnings before today’s open: INFY, JPM, WFC
Notable earnings after today’s close: none
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Oct 11)”
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There are few markets anywhere worthy of a long position. The Dow for instance, has been locked in a broad 1000 point trading range of 15,600 to 14,600 for the past 4 to 5 months, the midrange of which is 15,100. This morning, the Dow is 15,051. Churning! And for traders a good way to lose money. Investors? Depends on time horizon but cash is a close tie.
The confidence in a debt default cure is low, and spending cuts are not negotiable, the sole question being when will it be noticed that spending cuts are inevitable and Americans are poorer soon to get more so, except for the 1% ( of whom serve in Congress. ) Maybe commodities, and consumers are the winners in the long run. IF there are to be winners. Its is Friday and gold is headed for 1280 or lower.
WHEN the bond yeilds go up,the debt ceiling is inevitable and usa will have to default with soverign risk worse than greece
before its to late cut all entitilments cancell unemployment benifits over 6 months and means test and have work for the dole–eventually cancell all pensions and have the old looked after by relitives like japan
raise capital gaind /transaction taxes and high income wealth tax
and like buffett said make ceos/directors and their families financially responsible for their or their companies actions
I did an analysis of what happens when there is a gap up in the market after a 10 (Thur) day low (Wed). I found that in the last 12 years or so this has happened 70 times. In about 1/2 of those times the market took out the old lows in the next month. In the rest the market bounced and never looked back.
Never play a 50-50 chance go with the 90-10s.
intraday the low looked like a false break low which is usual for a up trend ,but who said we are in a up trend–could get a lower high set up for a rare crash cenerio like 87
those are the only 2 remaining opts –new high or lower high
of corse its already been planed –yes wekkly opts control the market and which way the instos are set will determin the monthly for crash or not
derivitives control the world
as mr atlas supposadly said –give me along enough lever and i can move the world
Jason did another very good mind set article the other day on profit /loss and gains controling the trader
one that only experiance can teach one
long time ago i found i had to hide the profit loss colum when intraday trading futures
with large parcells on high margin
i have 6 platforms for futures brokers and i just have the orderpads open and the one charting computer to make decisions of
well done Jason on ur mind set posts
daytrading is 90% mindset
Jason
can u do a mindset article on disipline
another quality daytraders ect have to address dayly
some times i get to impulsive and sometimes i get out to early
has the tech bubble burst
what will determin the direction of the world will be if nas 100 can reach it spike exhaustion highs of 3250 ish
spikes reverse the same fast way but not till the poisioned apples and google ect report
again its a opts thing
Mornin’ all.
Resistance from current level to SPX 1700. If 1700 is broken, mkt may reverse and pullback as low as 1688-1685. It can go even lower and still keep the bullish trend after y’day’s big move, but normal retracement would be to that level and then resume the climb.