Before the Open (Mar 7)

Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets closed mostly up. Australia rallied 1%; China gained 0.8%. Japan dropped 0.6%; Singapore fell 0.5%. Europe is currently mostly down, but losses aren’t great. Russia is up more than 1%, and Poland is also doing well. Italy is down more than 1%; London, Germany, France, Austria, the Netherlands, Prague, Spain, Belgium and Portugal are also weak. Future here in the States point towards a moderate gap down open for the cash market.
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Recent Trading Ideas
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The dollar is up. Oil is up, copper is up. Gold and silver are up. Bonds are down.
For the first time in a couple months the market posted a 3-week win streak. The buying pressure has been steady, it’s been consistent and at times it’s been relentless. All the indexes posted gains for the week, and all the closes were near their highs.
Commodities have been leading the way. Virtually every day for three weeks the leading groups are nonferrous metals, gold, silver, oil & gas (various groups), steel, coal, copper and others. Every day.
Many stocks have rallied 50% or more in just a couple weeks. Some have doubled. Glencore (GLNCY), which was left for dead in January, has more than doubled.
And the market’s breadth has improved significantly. This is a great sign. It’s true that the FANG stocks have lagged, but consider the fact that instead of a small number of stocks doing well and everything else lagging, we now have a lot of stocks doing well.
My near- and intermediate-term bias remains to the upside. The S&P hit my first target (1950) and then my second target (2000). The breadth of the market’s advance along with the significantly-improved indicators tell me the upside is likely to continue, even if prices back off in the near term.
Things will be very telling the next couple weeks. The first move off an over-sold level is easy. There will always be bottom-fishers and sentiment and short interest get so swung to the negative side, it’s not hard for the market to rally.
If the S&P can rally back to its highs without experiencing a significant correction, 2016 may end up being a big, flat, range-bound year. If the index does pull back, but the pullback is shallow, my conclusion will be the same. But if a significant correction plays out soon, another lower high will be in place, and I’ll consider the long term trend to be down. It depends on what happens the next few weeks. Continued strength? Shallow correction? Deep correction. We’ll see. More after the open.
Stock headlines from barchart.com…
Dunkin’ Brands Group (DNKN +1.43%) was downgraded to ‘Neutral’ from ‘Buy’ at Guggenheim Securities.
Statasys Ltd. (SSYS +12.68%) was downgraded to ‘Underweight’ from ‘Neutral’ at JPMorgan Chase.
Del Taco (TACO -2.60%) reported Q4 EPS of 12 cents, weaker than consensus of 16 cents, and then lowered guidance on fiscal 2016 EPS to 53 cents-56 cents, below consensus of 59 cents.
Cardinal Health (CAH -0.12%) was added to Goldman Sach’s Conviction Buy list.
Pier 1 (PIR -0.18%) reported preliminary Q4 comparable sales were down -0.7%, a smaller decline than expectations of down -2.0% to -4.0%.
UDR Inc. (UDR -4.85%) was upgraded to ‘Outperform’ from ‘Market Perform’ at BMO Capital Markets.
Wynn Resorts (WYNN -3.29%) was upgraded to ‘Boy’ from ‘Neutral at UBS.
Ingersoll-Rand (IR -0.24%) was upgraded to ‘Buy’ from ‘Neutral’ at Nomura with a price target of $68.
C. H. Robinson Worldwide (CHRW +1.64%) was downgraded to ‘Market Perform’ from ‘Outpeform’ at BMO Capital Markets.
Du Pont (DD +2.05%) climbed over 6% in after-hours trading after BASF said it was working with banks to weigh a counter bid for DuPont
Lattice Semiconductor (LSCC -0.86%) slumped 10% in after-hours trading after it said CFO Joe Bedewi will leave the company effective April 2.
Apache Corp. (APA +6.54%) said it will close its Alaska operations and won’t pursue extensions of its acreage leases that are set to expire later this year.
Carmike Cinemas (CKEC +16.49%) was downgraded to ‘Market Perform’ from ‘Outperform’ at Barrington Research.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
8:30 Gallup US Consumer Spending Measure
10:00 Labor market condition index
12:30 PM TD Ameritrade IMX
3:00 PM Consumer Credit
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers