Before the Open (Aug 26)

Posted on by Jason Leavitt

Good morning. Happy Tuesday.
I’m doing a 45-min webinar for Trader Planet on Thursday after the close. Register here.
The Asian/Pacific markets closed mixed. China dropped 1%, Indonesia 0.7% and Japan 0.6%. There were no big upside winners. Europe is currently mostly up. Spain and Greece are up 0.8%, followed by Italy and France (up 0.7%) and Austria (up 0.6%). Futures here in the States point towards an up open for the cash market.

The dollar is flat. Oil is up, copper is down. Gold and silver are up.
The Nas and SPX gapped to new highs yesterday; the Dow isn’t far behind. The bulls will take the gains, but the market made no progress intraday. The mid caps lag the large caps by a moderate margin while the small caps lag by a bunch. The divergence is obvious and should not be ignored.
Also a concern is the lack of breadth. New highs have not expanded much, and the bullish percent charts are well below their high. Several indexes are at or near new high, but not as many stocks seem to be participating as one would think.
The extent of the rally also makes me wonder what kind of juice is left in the tank. The market has gone virtually straight up and has not dropped two consecutive days since the end of July.
Overall I like the market…my bias remains to the upside. But in the near term, the risk/reward isn’t great…and we don’t have many good set-ups to play anyways. I guess you can say I’m in “wait and see” mode. I’d love a pullback.
Russia President Putin and Ukraine President Poroshenko are set to meet today in Minsk, Belarus.
Stock headlines from barchart.com…
Best Buy (BBY +2.53%) reported Q2 EPS of 44 cents, well ahead of consensus of 31 cents.
Tech Data (TECD +0.67%) reported Q2 non-GAAP EPS of $1.12, much higher than consensus of 77 cents.
Salesforce.com (CRM -0.95%) files to sell 7.2 million shares of common stock for holders.
Sanderson Farms (SAFM +1.96%) reported Q3 EPS of $3.30, well below consensus of $3.82.
ArcelorMittal (MT +0.36%) was upgraded to ‘Buy’ from ‘Sell’ at UBS.
Comtech Telecommunications (CMTL +4.84%) rose 3% in after-hours trading after it confirmed that it is exploring strategic alternatives to enhance shareholder value, including a possible merger or sale of the company.
Castleton Commodities reported a 9.9% passive stake in Torchlight Energy Resources (TRCH -2.34%).
D. E. Shaw & Co reported a 5.0% passive stake in Liberty Media (LMCA -0.37%).
Owl Creek reported a 5.8% passive stake in Seventy Seven Energy (SSE +1.22%).
OZ Management reported an 8.04% passive stake in Biglari (BH -0.58%).
Amazon.com (AMZN +0.73%) announced that it reached an agreement to acquire Twitch Interactive for $970 million.
ModusLink Global Solutions reported a 9.9% stake in Medifast (MED -0.14%).
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
7:45 ICSC Retail Store Sales
8:30 Durable Goods
8:55 Redbook Chain Store Sales
9:00 FHFA House Price Index
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
1:00 PM Results of $29B, 2-Year Note Auction
Notable earnings before today’s open: BBY, BMO, BNS, DAKT, DSW, MOV, RGS, SAFM, TECD, TSL
Notable earnings after today’s close: ADI, ARUN, BOBE, DY, GSM, HEI, NMBL, SLH, SWHC, TIVO
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Aug 26)”

  1. Not much new. Will use language from IBD regarding volume: “volume-challenged session.” SPX made a historic high and NAS made a 14 yr high (and boy do I remember the year 2000 well).
    We are well due for a pullback, but that doesn’t mean we’ll get one (hardly did in 1999- 2000 incidentally), so you play what you have.
    Futures are up mildly, so if they hold, we could break into 2000 again, but a drop to 1998-96 would be normal. We could go as low as 1991 and not be remotely bearish. As I’ve said before, we could drop to 1983-78 and still the market has a bullish tone. Traders’ temperament will be another thing.
    Futures are +2.50 at 915.

      1. Hey Jim. Roger dentist. Right, the target for 2030 is there. The question is always, direct move towards it or zig and zag? I think the latter, but am ready for the former. Like Jason says, sometimes thinking too much can hurt you in this game. Trade what you see, not what you expect.

          3. As you can see, this 2002 SPX level is resistance. Above 2003-4, it’s broken. If not, we head down to the area of y’day’s close.

  2. i see weak strugling world markets including german dax and its partner nas 100 that is the weakest today
    equally divided tech analysts–up and down
    everyone expecting a blow off top
    the bears forcing the bulls to buy at rediculous prices on no vol
    just what the boyz want as they get set short
    remember their are two parties to a trade and the boyz take the opposite side to what the market is doing
    that said we could easerly have a blow off up or hopefully more volitility

  3. is it war and sanctions causing a flight to usd and equities out of euro
    or totally insolvent europe banks with no one to bail them out but bond holder and depositors
    or perhaps chinas housing market
    a 10 year implosion would be great riding the world of coruption

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