Before the Open (Sep 22)

Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly down. China, Hong Kong, Taiwan and Australia each dropped more than 1%. New Zealand rallied 1%. Europe is currently mostly down. Greece is down 1.4%, followed by Prague (down 0.85%), Italy (down 0.8%) and Russia and Amsterdam (down 0.6%). Futures here in the States point towards a moderate gap down open for the cash market.

The dollar is down. Oil is flat, copper is down. Gold and silver are down.
We enter this new week with a down bias and mixed signals.
The large caps are doing just fine…but the small caps, and to a lessor degree the mid caps, have been weak.
Some indicators (put/call ratio, % of SPX stocks above their 20-day MA, SPX high-low) support a rally here, but others (AD line, AD volume line, bullish percent index, cumulative NYSE AD line, new lows) point towards internal weakness and bad breadth.
Unless the indicators improve and the small caps start to at least match the movement of the large caps, my bias will be to the downside…even though several indexes high new highs on Friday. I don’t like the lack of participation.
And as an added bonus, the next two weeks are among the weakest of the year. Historical precedent has failed to call recent moves, so yes we can take this with a grain of salt. Still not a bad idea to keep in mind.
And for what it’s worth, we are in a very quiet time regarding news. The Fed is done, earnings season doesn’t start for a couple weeks, the Alibaba IPO is done. Unless something major happens overseas, the market, which has relied on a steady flow of external factors to help guide itself, will be left alone. From a technical standpoint this is good, but I wonder if the market so news-dependent that it’ll feel lost. We’ll see.
Unless the bulls grab hold, my bias is to the downside.
Stock headlines from barchart.com…
Yahoo (YHOO -2.73%) was downgraded to ‘Neutral’ from ‘Buy’ at BofA/Merrill Lynch.
Wynn Resorts (WYNN -1.36%) and Las Vegas Sands (LVS -2.53%) were both downgraded to ‘Market Perform’ from ‘Outperform’ at Wells Fargo.
Dun & Bradstreet (DNB -0.11%) was upgraded to ‘Outperform’ from ‘Neutral’ at RW Baird
Walgreen (WAG -0.47%) was downgraded to ‘Equal Weight’ from ‘Overweight’ at Barclays.
GlaxoSmithKline (GSK +0.19%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.
Commerzbank (CRZBY -0.36%) was downgraded to ‘Underperform’ from ‘Neutral’ at Exane BNP Paribas.
AutoZone (AZO -1.10%) reported Q4 EPS of $11.28, better than consensus of $11.26.
Point72 Asset reported a 5.0% passive stake in Pier 1 Imports (PIR +0.63%) .
The Financial Times reports that General Electric (GE +0.31%) was in talks with Dresser-Rand (DRC +9.42%) on a potential deal.
Gabelli reported a 5.29% stake in Post Holdings (POST -2.27%).
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
8:30 Chicago Fed National Activity Index
10:00 Existing Home Sales
7:30 PM Fed’s Kocherlakota: Monetary Policy
Notable earnings before today’s open: AZO, NEOG
Notable earnings after today’s close: ASNA
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers