Before the Open (May 20)

Posted on by Jason Leavitt

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mixed. Indonesia dropped 2.4%; New Zealand also moved down. Japan and Hong Kong moved up. Europe is currently mixed. London and Norway are down. Greece is up 4.7%. Futures here in the States point towards a flat open for the cash market.

The dollar is up slightly. Oil is up, copper is down. Gold and silver are down.
Yesterday the market followed through on last Friday’s late-day pop. The small caps led the way followed by the Nas and mid caps. This is what the bulls want to see on an up day, but there’s much more work to do.
Overall the market continues to put off mixed signals. The Dow and SPX look pretty good. The Nas, small caps and mid caps don’t.
Some indicators are doing ok, others are clearly pointing down and supporting more downside…still others are very neutral.
We have equal number of average long and short set ups to play…no clear picture there either.
Trading isn’t extremely hard if you pick your spots well and stick with the best set ups in the strongest groups. Right now nothings is in place. Short term moves don’t have legs…the intermediate term is mixed…the only leadership group worth playing is oil…and with both longs and shorts revealing themsevles, a bottoms-up approach leads to a mixed picture. This is not a great trading environment for swing trading. Preserve capital.
Stock headlines from barchart.com…
Dick’s Sporting Goods (DKS +3.08%) reported Q1 adjusted EPS of 50 cents, lower than consensus of 52 cents.
J.C. Penney (JCP -3.80%) was downgraded to ‘Underperform’ from ‘Market Perform’ at Wells Fargo.
Staples (SPLS +1.13%) reported Q1 EPS of 18 cents, below consensus of 21 cents.
Home Depot (HD -1.11%) reported Q1 EPS of 96 cents, weaker than consensus of 99 cents.
Dow Chemical (DOW +0.73%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Wells Fargo.
Credit Suisse raised Canadian Pacific’s (CP +1.11%) price target to $205 from $183 and kept an ‘Outperform’ rating on the stock.
Donaldson (DCI +1.54%) reported Q3 EPS of 46 cents, below consensus of 47 cents.
Carnival (CCL +1.57%) rose almost 3% in pre-market tradng after it announced it will add two new ships to its fleet in Australia, making it Australia’s biggest year-round fleet of cruise ships.
According to Bloombreg, Credit Suisse (CS -0.92%) will plead guilty to charges that it assisted American citizens in evading income taxes through the use of secret accounts and will pay $2.5 billion to resolve the 3-year probe.
Mast Capital Management reported a 5% passive stake in Ardmore Shipping (ASC +0.23%) .
Bristol-Myers reported a 5.35% passive stake in Alder Biopharmaceuticals (ALDR +0.40%) .
Urban Outfitters (URBN -0.11%) fell nearly 5% in after-hours trading after it reported Q1 EPS of 26 cents, below consensus of 27 cents.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
12:30 PM Fed’s Plosser: U.S. Economic Outlook
Notable earnings before today’s open: AINV, DCI, DKS, EJ, HD, HGG, MDT, RRGB, SPLS, SSI, TJX
Notable earnings after today’s close: ADI, CRM, HEI, INTU, TDW, VSAT
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

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

  1. Well said, Jason: “This is what the bulls want to see on an up day, but there’s much more work to do. Overall the market continues to put off mixed signals.”
    We are fighting the seasonal “sell in May” while the bulls have targets above 1900 and consider that unfinished work, so the split personality is revealed as biforcated markets.
    Bulls will try to hold above 1880 today. If so, trgt is at 1889. If they don’t, the market can come down to 1874-70 and still be considered bullish.
    Resistance will be 1885
    Futures -2.50 at 9 am. Were +2.5 to -3.5 overnight.
    I will not be able to post Wed am

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