Before the Open (Dec 10)

Posted on by Jason Leavitt

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly down, but only Indonesia (up 1.5%) and Singapore (down 1%) moved much. Europe is currently mixed. Greece and Amsterdam are up the most; France, Stockholm and Switzerland are down the most. Futures here in the States point towards a flat-to-down open for the cash market.

The dollar is down. Oil and copper are up. Gold and silver are up.
Yesterday was extremely slow. The market traded in a tight range, and other than a morning drop by the Russell which only lasted 30 minutes, there were no winners. The range was tight, and there was a definite lack of energy on both sides of the market. But as I stated after yesterday’s close, I’m not complaining. There are a handful of breadth indicators not supporting the market’s uptrend in the near term, and we have a lack of good set ups to play with. A few days (or longer) of dead trading that allows the charts to better set up is fine with me.
That’s it for now. The market needs to flip over another card or two before I commit to a near term bias.
Stock headlines from barchart.com…
Citigroup keeps a ‘Buy’ rating on FedEx (FDX +0.30%) and raised its price target on the stock to $170 from $140.
Celgene (CELG +2.15%) was upgraded to ‘Outperform’ from ‘Neutral’ at Credit Suisse.
Burlington Stores (BURL +0.29%) reported a Q3 adjusted EPS loss of -5 cents, smaller than consensus of -6 cents.
AutoZone (AZO -0.49%) reported Q1 EPS of $6.29, stronger than consensus of $6.27.
Toll Brothers (TOL +2.10%) reported Q4 EPS of 54 cents, better than consensus of 43 cents
Harman (HAR -0.36%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Wells Fargo who also raised their price target on the stock to $95-$100 from $74-$78.
Vivendi (VIVHY -0.31%) was upgraded to ‘Buy’ from ‘Hold’ at Deutsche Bank.
Vail Resorts (MTN +1.44%) reported a Q1 EPS loss of -$2.04, a bigger loss than consensus of -$1.91.
Casey’s General Stores (CASY -1.43%) reported Q2 EPS of $1.06, below consensus of $1.14.
Pep Boys (PBY -0.22%) slumped over 12% in pre-market trading after it reported Q3 EPS of 2 cents, well below consensus of 14 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
7:30 NFIB Small Business Optimism Index
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
10:00 Wholesale Trade
1:00 PM Results of $30B, 3-Year Note Auction
Notable earnings before today’s open: AZO, HDS, HITK, TOL
Notable earnings after today’s close: AVNR, DDC, HRB, IRET, MIND, PLAB, PPHM, SWHC
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Dec 10)”

  1. Among the litany of other classic features of a speculative bull market peak, margin debt on the NYSE has surged to the highest level in history, and at nearly 2.5% of GDP, exceeds all but two months in 2000 and 2007. The amount being borrowed to buy stocks on margin is now 26% the size of all commercial and industrial loans in the entire U.S. banking sector. As low-quality, high-risk borrowers rush to take advantage of the present speculative appetite, issuance of leveraged loans (particularly the junkier “covenant-lite” forms) has now hit a record high, already eclipsing the previous record in 2007 at the height of pre-crisis yield-seeking. New equity issuance is also running at the fastest pace since any point except the 2000 bubble peak. At the same time, Bloomberg reports that investors are plowing more into stock mutual funds than at any point since the 2000 bubble peak. Keep in mind how this works – every buyer is matched with a seller in equilibrium, so the same amount of stock is being sold by institutions and other non-retail investors. One doesn’t need to think long to answer who is likely to be the “smart money” in this trade, as the history of surges in retail participation provides a rather firm answer to that question. courtsey: hussmanfunds.com

  2. the potentualy nice island reversal of the naughty nasty dr nas 100 will leave a island of debourtuary,fantasy ,geeks on margin behind –all eating apples with worms

  4. Didn’t get the pullback I was looking for ye’day, but we’re getting it overnight. Currently bouncing at a support level at 1803. (Since we’re approaching futures roll-over Thursday, the delta in price between futures and cash spx is zero, so futures = spx price levels.)
    So we’ll gap down at the open. If they hold 1803, we’ll proceed towards target at 1825.
    If, on the contrary, 1800 breaks, we’ll go down to 1794.50. That support extends down to 1790.
    If that layer breaks, then headed lower to Wed’s low.
    My gut says one of these two levels should hold.
    Futures range overnight: +2.50 to -6.50. Now: -6.00

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