Before the Open (Aug 12)

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly up. Australia and India posted solid gains; the other markets were little changed. Europe is currently mostly down. Greece is up 2.9%, but Germany, France, Amsterdam, Italy, Spain, Norway and Prague are down moderately. Futures here in the States point towards a flat-to-up open for the cash market.

The dollar is up. Oil is down, copper up. Gold and silver are up.
So we got a big up day Friday and some follow through yesterday, but most of the follow through was in the form of an opening gap because intraday gains were given back by the close. I’ll take the gains – they’re better than nothing – but it would have been nice to see a stronger close.
With many of the indicators having moved to extreme levels, there is a lot of support for a tradeable bounce. We’ve also gotten some improvement from individual stocks – not great improvement, but enough that we have some decent patterns to play with. Absent negative news, the path of least resistance is up.
So far what has taken place (regarding the recent correction) is no different than what we’ve gotten in the past.
The SPX weekly has successfully tested a trendline that goes back nearly two years.

And the daily has successfully tested a significant MA which has acted as support.

One of these times these key levels will not hold. Maybe it will be this time, but until it happens, going all in on the short side would not be wise. The bounce we’re currently getting will go a long way hinting at the market’s true strength. More after the open.
Stock headlines from barchart.com…
Dean Foods (DF -3.86%) was upgraded to ‘Outperform’ from ‘Neutral’ at Credit Suisse.
Stryker (SYK -0.33%) was upgraded to ‘Buy’ from ‘Hold’ at Needham.
Citigroup added shares of First Solar (FSLR +1.98%) and Foot Locker (FT +0.55%) to its Focus List.
Towers Watson (TW +1.65%) reported Q4 adjusted EPS of $1.34, higher than consensus of $1.25.
Flowers Foods (FLO +0.35%) reported Q2 EPS of 21 cents, weaker than consensus of 24 cents, and then cut its fiscal 2014 EPS view to to 92 cents-98 cents from 98 cents-$1.05, below consensus of $1.02.
Abercrombie & Fitch (ANF +0.39%) was upgraded to ‘Buy’ from ‘Hold’ at Stifel with a price target of $50.
Paulson & Co. reported a 10.1% passive stake in Cobalt (CIE +2.46%) .
MasTec (MTZ +4.50%) fell nearly 4% in after-hours trading after it reported Q2 adjusted EPS of 40 cents, right on consensus, but then lowered guidance on fiscal 2014 adjusted EPS to $1.55-$1.58, well below consensus of $1.82.
Convergys (CVG +1.62%) reported Q2 adjusted EPS of 34 cents, better than consensus of 32 cents.
Caesar’s (CZR +2.32%) reported a Q2 EPS losss of -$3.24, over double consensus of a -$1.19 loss.
Ventas (VTR +0.35%) reported Q2 normalized FFO of $1.12, higher than consensus of $1.09.
Nuance (NUAN +1.06%) tumbled 9% in after-hours trading after it reported Q3 EPS of 27 cents, right on consensus, but then lowered guidance on fiscal 2014 EPS to $1.03-$1.08, below consensus of $1.13.
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 Job Openings and Labor Turnover Survey
1:00 PM Results of $27B, 3-Year Note Auction
2:00 PM Treasury Budget
Notable earnings before today’s open: AER, ARRY, CNCE, CST, FLO, IDRA, INSY, KATE, NOAH, PETX, OTC:RTRX, SOL, TW, USAC, VAL
Notable earnings after today’s close: CHMI, CREE, EPAY, FMI, FOSL, FTD, HMIN, JDSU, JKHY, KING, MYGN, OTC:OPWR, PE, PRSS, SYNC, TCX, URS, VSAT
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers