Before the Open (Dec 8)

Posted on by Jason Leavitt

Good morning. Happy Monday. Hope you had a great weekend.
The Asian/Pacific markets closed mostly down. India dropped 1.2%, followed by Indonesia (down 0.85%) and Singapore (down 0.8%). China rallied 2.8%. Europe is currently mostly down. Russia is down 2.3%, followed by Norway (down 1.4%), London and France (down 0.86%) and Spain and Italy (down 0.7%). Greece is up 0.8%. Futures here in the States point towards a moderate gap down open for the cash market.

The dollar is up. Oil and copper are down. Gold and silver are up.
As discussed over the weekend in the Weekly Report, a pullback is looming. It doesn’t have to start today or tomorrow, but absent a surge from many breadth indicators, it’s in the pipeline.
The Dow and S&P hit new highs last week while the Nas, Russell and mid caps failed to match the movement.
Also, the AD line, AD volume line, NYSE new highs, NASDAQ new highs and the percentage of SPX stocks above their 20-day MA or at a 20-day high are all lagging. Literally we have negative divergences across-the-board, and unless these are negated soon, the market is very likely to correct. This doesn’t necessarily mean a full-blown pullback is coming, but enough of a pullback to allow everything to reset.
Don’t give profits back on longs. Be careful initiating new longs…you may only be in the positions for a day or two instead of weeks. Take what you can get; this is not a time to be greedy. More after the open.
Stock headlines from barchart.com…
Norfolk Southern (NSC -0.21%) was downgraded to ‘Neutral’ from ‘Buy’ at BofA/Merrill Lynch.
Canadian Natural (CNQ -0.76%) was downgraded to ‘Neutral’ from ‘Buy’ at Citigroup.
Citigroup keeps a ‘Buy’ rating on Apple (AAPL -0.42%) and raises its price target on the stock to $135 from $120.
eBay (EBAY +0.26%) was upgraded to ‘Buy’ from ‘Hold’ at Stifel with a price target of $65.
Deutsche Bank (DB +2.35%) and US Bancorp (USB +1.35%) were both downgraded to ‘Underperform’ from ‘Market Perform’ at Keefe Bruyette.
Southwest Airlines (LUV -0.65%) was upgraded to ‘Buy’ from ‘Neutral’ at Goldman Sachs.
Canadian Pacific (CP -1.32%) was downgraded to ‘Neutral’ from ‘Buy’ at Goldman Sachs.
Cubist Pharmaceuticals (CBST -0.21%) surged 29% in pre-market trading after Merck said it will acquire the company for $102 a share in a deal valued at over $7 billion.
Exxon Mobil (XOM -0.58%) fell -1.7% and Schlumberger (SLB -0.31%) slid 1.2% in pre-market trading after the price of crude oil dropped to near last week’s 5-1/3 year low.
K+S (KPLUF -2.97%) was downgraded to ‘Sell’ from ‘Neutral’ at Goldman Sachs.
Time Warner (TWX -0.47%) was initiated with a ‘Buy’ at UBS with a price target of $100.
Disney (DIS +0.57%) was initiated with a ‘Buy’ at UBS with a price target of $106.
Pershing Square reported a 8.3% stake in Zoetis (ZTS -0.05%) .
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
12:30 PM TD Ameritrade IMX
Notable earnings before today’s open: TPLM, MTN
Notable earnings after today’s close: ABM, DMND, HRB, MCC, PBY, PLAB
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Dec 8)”

  2. With the Dow making its milestone mark topping 17,000 for the first time right before 4th of July holiday. It is on the verge to hit 18,000. Interestingly, the Dow had two in 2013. It closed above 15k for the first time on May 7,then above 16k on Nov. 21,during a year when the index rocketed 27%. I can anticipate another double milestone this year year. Keep a close eye it.

  3. the indicators have been there for a while with a island reversal for the nas 100
    and other markets at the top of the jaws of death broadening megaphone long and short term highs
    but is this a small corection as Jason says or the end of the world

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