Before the Open (Aug 11)

Posted on by Jason Leavitt

Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed mostly up. Japan rallied 2.4%; Indonesia, Taiwan, Hong Kong and China moved up more than 1%. Europe is currently posting solid, across-the-board gains. Germany, Austria, Amsterdam, Norway, Sweden, Prague, Russia and Greece are all up more than 1%. Futures here in the States point towards a relatively big gap up open for the cash market.

The dollar is up. Oil and copper are up. Gold and silver are up.
To some degree, today’s opening gap up supports my near term bullish bias. Between the positive divergence between the small and large caps which developed last week and the market’s ability to rally big Friday on news the US was taking military action in Iraq, the path of least resistance in the near term is up. Plus many indicators have moved to extreme levels, and the charts of individual stocks have improved.
I’m not saying a bottom is in place and new highs are coming. I’m just saying right now I’m only interested in being long, and we’ll see how things play out. Does a rally come with force and energy? Does it go far enough to neutralize the downtrend that has developed? Do some leadership groups start to form? We’ll see. Right now the advantage goes to the bulls, and it’s up to them to keep it.
Stock headlines from barchart.com…
Freeport McMoRan (FCX +0.94%) was upgraded to ‘Buy’ from ‘Hold’ at Argus.
Priceline.com (PCLN -0.28%) reported Q2 EPS of$12.51, well ahead of consensus of $12.04.
Tesla Motors (TSLA -1.69%) rose over 2% in pre-market trading after Deutsche Bank upgraded the stock to ‘Buy’ from ‘Hold.’
PepsiCo (PEP +0.43%) was upgraded to ‘Buy’ from ‘Neutral’ at UBS with a price target of $100.
Wal-Mart (WMT +0.97%) was downgraded to ‘Hold’ from ‘Buy’ at Jefferies.
Southwest Gas (SWX +2.94%) was upgraded to ‘Buy’ from ‘Hold’ at Brean Capital.
Hyatt Hotels (H -0.53%) was upgraded to ‘Buy’ from ‘Hold’ at Stifel.
Sentry Investments reported a 17.0% passive stake in Timmins Gold (TGD -0.57%) .
Capital Research reported a 10.1% passive stake in Herbalife (HLF +2.98%) and a 10.4% passive stake in GW Pharmaceuticals (GWPH +0.79%) .
Baupost Group reported a 14.06% passive stake in Veritiv (VRTV -0.21%) .
Karpus reported a 12.87% passive stake in Montgomergy Street Securities (MTS -0.98%) .
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
No events scheduled.
Notable earnings before today’s open: BITA, CACQ, DF, DVR, EGRX, EVEP, GOGO, HE, HNR, HPT, MGIC, MNKD, MPAA, PCLN, RGEN, RICE, SCLN, SYY, TECH, VLP, WAC, WBAI, WRES
Notable earnings after today’s close: AMBC, ATHX, BDE, CALL, CVG, CYNI, CZR, FTEK, FXEN, GALE, GCAP, GERN, GNMK, HALO, HTHT, ICEL, ICUI, IPAR, MM, MR, MTZ, NIHD, NOR, NUAN, ONTY, OPK, PDLI, RAX, REN, SKH, SUPN, TCRD, UNTD, VTR
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Aug 11)”

  1. Let me preface my comment with this: I don’t disagree with what Jason’s saying, but there is resistance to deal with just above.
    Now, with that out of the way, this is what I prepared prior to reading Jason’s remarks this morning:
    Something about “when bullets fly so does the market.”
    And on top of Friday, futures went to +11.75 since the open last night.
    However.
    We are going to face stiff resistance SPX 1932-33 up to 1953-54. Unless and until
    we can break 1954, be very careful.
    Friday’s volume was not heavy, so this might just be shorts with their hair on fire.
    We will gap higher at the open, but any pullback that occurs today can go no lower
    than 1918-1912. If it does, the bullish case is cracking.
    Bonds are bullish, but were more bullish at their open.
    At 910, futures +10.50
    I will be late tomorrow morning.

    2. Jim
      GM
      oops, my math error. Monday morning is my excuse.
      This is correct: Resistance will be at 1942-43.
      The upper level IS 1953-54.
      To Daddy: No question that we have seen a bottom, at least for the short term. According to my rules, breaking 1954 will validate the bottom we saw overnight Thurs-Fri. Til then, enjoy the up move, just be cautious. We may not get a full pullback till tomorrow, but I’d rather see 1954 broken before we do.

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