Before the Open (Oct 14)

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mixed. Japan dropped 2.4%; New Zealand and Hong Kong fell around 0.4%. Australia rallied 1%, followed by Taiwan (up 0.65%). Europe currently leans to the downside. Greece is down an incredible 5.2%. Italy, Austria, Belgium, Amsterdam and Prague are down 0.7 – 0.9%. Russia is up 1.22%. Futures here in the States point towards a relatively big gap up for the cash market.

The dollar is up. Oil is down, copper up. Gold is down, silver up.
The market got hit hard again yesterday – the third straight big down day. The S&P is now down about 90 points in three days. Volume has been high, volatility high, the intraday ranges huge. What used to take place over many days or more than a week is now taking place in an hour. The market has definitely changed. Support levels have meant little. When stockholders want to sell, throw all forms of TA out the window. At that point it’s all emotions.
In my opinion, lower prices are coming…my SPX target remains the low 1800’s. A bounce is shortable.
When the market trends up, it’s easy to make money. Buy breakouts, buy dips, and of course, always protect your downside. when the market trends down, you gotta shift gears. Sell rallies (my preference over selling breaks of support). Do not get married to a stock. Do not cling to a group that once provided you many opportunities to make money on the long side. Go look at the oil group. Stocks that rallied 50-100% in the spring and summer have gotten clobbered. As my friend Gary says, stocks are employees. They’re hired to do a job. When they stop doing the job, fire them and hire another one. Never cling to an old favorite. More after the open.
Stock headlines from barchart.com…
JPMorgan Chase (JPM -0.62%) reported Q3 EPS of $1.62, well ahead of consensus of $1.39.
Netflix (NFLX -2.99%) was upgraded to ‘Buy’ from ‘Hold’ with a $600 price target at target at BTIG.
BorgWarner (BWA -3.12%) and Delphi Automotive (DLPH -3.40%) were both upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.
Ford (F -1.81%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Wynn Resorts (WYNN -1.85%) was downgraded to ‘Neutral’ from ‘Buy’ at BofA/Merrill Lynch.
Corning (GLW -2.92%) was downgraded to ‘Neutral’ from ‘Buy’ at BofA/Merrill Lynch.
EOG Resources (EOG -6.76%) was upgraded to ‘Outperform’ from ‘Market Perform’ at Bernstein.
Cigna (CI -1.00%) was downgraded to ‘Neutral’ from ‘Buy’ at Sterne Agee.
Barclays downgraded both Tyco (TYC -1.17%) and Eaton (ETN -1.10%) to Equal Weight from Overweight.
S&P late yesterday announced changes to the S&P MidCap 400 and S&P SmallCap 600 indexes. In the S&P MidCap 400 index, Tanger Factory Outlet Centers (SKT +1.42%) will replace URS Corp. (URS -1.11%). In the S&P SmallCap 600 index, American Equity Investment Life Holding Co. (AEL +4.30%) will replace Tanger Factory Outlet Centers (SKT +1.42%) and AngioDynamics (ANGO +5.57%) will replace Annie’s (BNNY unch).
Lululemon’s (LULU -3.15%) Q3 sales are tracking below consensus, according to ITG Research.
Iliad announced that it has ended its plan to acquire T-Mobile (TMUS -2.50%).
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
Today’s economic calendar:
7:30 NFIB Small Business Optimism Index
7:45 ICSC Retail Store Sales
8:55 Redbook Chain Store Sales
Notable earnings before today’s open: C, DFRG, DPZ, JBHT, JNJ, JPM, WFC, WWW
Notable earnings after today’s close: CSX, INTC, LLTC, OZRK, SURG
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers