Before the Open (Feb 20)

Posted on by Jason Leavitt

Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly down. Japan dropped 2.2%, Hong Kong 1.2% and India, South Korea and Taiwan also suffered moderate losses. Europe is currently down across the board. Germany and Amsterdam are down more than 1%; Belgium, Stockholm, Switzerland, Russia, Italy and Spain are also down noticeably. Futures here in the States point towards a gap down open for the cash market.

The dollar is up. Oil and copper are down. Gold and silver are down.
Facebook (FB) is buying privately held WhatsApp for $19B. Wall St. “approves” of the purchase…FB is only down 1.5% in premarket trading.
Tesla (TSLA) is up 23 bucks (12%) in premarket trading…earnings related.
Yesterday the market dropped after FOMC minutes revealed a few Fed officials saw a chance to hike rates relatively soon. This spooked Wall St. who has been led to believe rates will be kept low for a very long time…well beyond when their metrics improve significantly.
But a little give back after the S&P rallies 100 points isn’t cause for panic. A rest – whether it comes in the form in a price pullback or sideways movement – is perfectly normal and healthy for a market that has run up and is showing signs it wants to run higher.
Many indicators have turned up from extremely low levels….this is good, and it has to continue to support more upside.
And many other indicators have hit over-bought levels…it would be normal for the market to rest before shooting higher again. High, over-bought prints from breadth indicators are not a reason to sell all holdings. Tops tend to be rounded, so even if a top is forming, it’ll take several weeks.
Manage positions wisely here. A little rest is overdue.
Stock headlines from barchart.com…
Wal-Mart (WMT -0.64%) reported Q4 EPS of $1.60, better than consensus of $1.59.
Hormel Foods (HRL +0.35%) reported Q1 EPS of 57 cents, right on consensus.
Apple (AAPL -1.58%) fell over 1% in pre-market trading after research firm Canalys said Apple’s smartphone market share in China fell to 7% in Q4 from 9% a year earlier.
DirecTV (DTV -0.16%) reported Q4 EPS of $1.53, stronger than consensus of $1.29.
Vectren (VVC -0.62%) reported Q4 EPS of 60 cents, better than consensus of 58 cents.
Facebook (FB +1.13%) fell over 3% in after-hours trading after it said it will acquire WhatsApp for $16 billion.
Curtiss-Wright (CW -2.53%) raised guidance on its 2014 EPS outlook to $3.30-$3.40 from $3.20-$3.35, higher than consensus $3.33.
Acadia Healthcare (ACHC -3.60%) lowered guidance on fiscal 2014 EPS to $1.26-$1.29, below consensus of $1.41.
Safeway (SWY +1.50%) rose over 3% in after-hours trading after it reported Q4 EPS ex-items of 53 cents, higher than consensus of 48 cents.
Jack in the Box (JACK +1.46%) reported Q1 EPS of 75 cents, stronger than consensus of 66 cents.
Avis Budget (CAR +2.77%) reported Q4 EPS of 15 cents, higher than consensus of 12 cents.
ARRIS (ARRS -1.79%) reported Q4 adjusted EPS of 54 cents, well above consensus of 45 cents.
Tesla (TSLA -4.94%) rose 10% in after-hours trading after he reported Q4 EPS of 33 cents, better than consensus of 21 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Consumer Price Index
8:30 Initial Jobless Claims
9:00 PMI Manufacturing Index Flash
9:45 Bloomberg Consumer Comfort Index
10:00 Philly Fed Business Outlook
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Notable earnings before today’s open: ACT, AER, CBB, CCO, CDE, CONE, CRIS, CRY, CVI, CVRR, CWEI, CYBX, DAN, DNR, DTV, ELOS, EXAS, FCN, FDML, FUN, HEP, HRL, HSC, HSNI, I, ICLR, ICON, IDCC, IMAX, IRC, LTM, LXP, MRGE, PAAS, PDCO, PEG, PWR, RS, SCG, SONS, SUI, THI, TK, TRP, TTC, UAN, UPL, WLK, WLT, WMT, WWE, YNDX
Notable earnings after today’s close: ACTG, AGU, AHS, ANAD, ARUN, BBG, BCOR, BLDR, BLOX, CENX, COG, DTLK, DXCM, ESRX, EXEL, EXR, FLTX, FNGN, FUEL, GRPN, HNSN, HPQ, INAP, INTU, IPXL, JWN, KND, LOPE, MDRX, MHK, MRC, MRVL, MTSN, MXWL, NEM, PCLN, PEB, PPC, PSA, QLIK, SEM, SSRI, SSTK, TRMR, TS, TTS, VMI, WAGE, WBMD, WRE, XNPT
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Feb 20)”

  1. Today cost of living fell to an annualized .1%. Close to disinflation. The Fed wants 2% annually. Could lead to policy changes. The RSI and the hammer candles are setting up for a major correction it seems. The most important number this week is the housing starts down 17% in one month, including FL, Ca. and Az. No weather issues in three large markets. Warning deflation, for which economic theory has no fix, can happen to the good guys too. Be cautious.

  2. A little something for everybody yesterday. Up to my target 1847 (hi 1847.50) at 1030, and that was the high of the day, all downhill from there. As Jason said, we need a correction, we’ve gone a ways without one.
    Today: futures appear to be wanting to get to even after hitting a low of -8 overnight. My guess is that after the open, they go lower to a support level equivalent to 1818-1819 and bounce from there. If that holds, tgt is 1860 ish. That support extends down to 1810-1811, which if broken, can take us quite a bit lower. Even if that happens, the uptrend is still intact, but it will throw a lot of doubt into the bulls’ minds and embolden the bears, which is exactly how the “boyz” operate: that builds fuel for the subsequent uptrend as the crowd is on the wrong side of the trade.
    If they go higher at the open, there is resistance at 1834 thru 1837.
    Overnight range +4 to -8, At 9 am futures boomed in response to the Flash Mfg report and went from -3 to +4 and at 915 are +1.50 now. Looks like they’re playing with us today, lots of headfakes in the premarket, feisty and out of character.

  3. ”tops tend to be rounded”
    not this one
    this is a ponsie fantasy liquidity driven ,insto manipulated spike exhaustion –4 fan line–
    that will either end as a long term broadening jaws of death that will eat all the bull
    instos are trading equities like they do silver/gold oil–boom and bust–they hit a top and crash
    or it ends tomorrow at opts ex lower top as like the 29-/1987 crash and a spike high nas 100
    their is no volume just greed in a no growth sick world economy

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