Before the Open (Mar 11)

Good morning. Happy Wednesday.
The Asian/Pacific markets closed mostly down. Hong Kong and Indonesia dropped 0.8%, Singapore and Malaysia about 0.6%. Europe is currently mostly up. Germany, France, Amsterdam and Italy are up more than 1%; Spain, Belgium, Stockholm, Switzerland and Russia are also posting solid gains. Greece is down 1%. Futures here in the US point towards a moderate gap up open for the cash market.

The dollar is up. Oil is up, copper is up. Gold and silver are down. Bonds are down.
Two of the last three days have been big down days…the S&P has now given back more than half of its February rally. The overall trend remains solidly up, but the diverging and falling breadth indicators, which started to weaken almost two weeks ago, have pulled the market down. I’m not that interested in going long swing trades, but let’s remember the market’s biggest up moves take place within downtrends – short term or long term downtrends – so before you back up the truck and go short, keep in mind on any given day we could get a surprise rally.
A quick look at the indicators tells me more downside is coming. They’re all moving in the bears’ direction but haven’t reached washout levels yet. It may take a few more days or a week. Nobody really knows. I only know the indicators haven’t yet plunged/surged to extreme levels.
If you’re a day trader, keep trading. Day to day you don’t care if the market goes up or down – you just want some intraday movement, and after a bunch of small range days at the end of February, that’s what we’re getting.
If you’re a swing trader, sure you can short, but the big money will be made riding the next leg up to new highs. So don’t be distracted by going short, and don’t let your positions alter your overall bias. If I’m wrong, if a top is now in place and we’re in the beginning stages of a downtrend, oh well. I’d rather be wrong once after a 6-year rally than always be wrong, like the permabears, or wrong every time the market pulls back a little. The long term trend is up until it’s not. More after the open.
Stock headlines from barchart.com…
Brown Shoe (BWS +0.25%) reported Q4 adjusted EPS of 20 cents, better than consensus of 16 cents.
Tiffany (TIF -1.15%) was upgraded to ‘Overweight’ from ‘Neutral’ at Atlantic Equities.
Citigroup kept its ‘Buy’ rating on Actavis (ACT -2.04%) and raised its price target on the stock to $360 from $325.
Scotts Miracle-Gro (SMG -0.50%) was upgraded to ‘Buy’ from ‘Neutral’ at SunTrust.
Credit Suisse (CS +6.67%) was upgraded to ‘Overweight’ from ‘Underweight’ at JPMorgan Chase.
Skyworks (SWKS -0.99%) will replace PetSmart (PETM -0.01%) in the S&P 500 as of today’s close.
EMC (EMC -3.27%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Wells Fargo.
L-3 Communications (LLL -1.91%) was initiated with a ‘Buy’ at Buckingham with a price target of $155.
Credit Suisse initiated Buffalo Wild Wings (BWLD -1.77%) with an ‘Underperform’ and a price target of $175.
Credit Suisse initiated YUM! Brands (YUM -1.96%) with an ‘Underperform’ and a price target of $74.
Credit Suisse initiated Dunkin’ Brands (DNKN +0.21%) with an ‘Outperform’ and named it a Top Pick with a $56 price target.
Verifone (PAY -2.75%) reported Q1 EPS of 44 cents, better than consensus of 41 cents, but then lowered guidance on fiscal 2015 EPS view to $1.78-1.82 from $1.85-$1.90, below consensus of $1.90.
Earnings and Economic Numbers from seekingalpha.com…
Today’s economic calendar:
7:00 MBA Mortgage Applications
10:00 Quarterly Services Report
10:30 EIA Petroleum Inventories
1:00 PM Results of $21B, 10-Year Bond Auction
2:00 PM Treasury Budget
Notable earnings before today’s open: BLT, BWS, EXPR, FGP, FLY, FSYS, VRA, WRES
Notable earnings after today’s close: CHMI, CMTL, CNAT, HMIN, IPAR, KKD, MW, OME, PLOW, RST, SCLN, SGMS, SHAK, TAHO, XNET, XOMA, ZOES
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers