Before the Open (Apr 5)

Good morning. Happy Tuesday.
The Asian/Pacific markets closed mostly down. Japan and India dropped more than 1%; Hong Kong, Singapore and Australia fell more than 1%. China rallied 1.5%. Europe is pretty much down across-the-board. Germany, France, Poland, Spain and Italy are down more than 2%; London, Austria, Belgium, the Netherlands, Norway, Sweden, Switzerland, Turkey, Denmark, Finland and Portugal are down more than 1%. Futures here in the States point towards a sizable gap down open for the cash market (S&P futures are down 15).
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My podcast – with Chat With Traders
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The dollar is up. Oil and copper are down small amounts. Gold and silver are up. Bonds are up.
I’m in a defensive frame of mine. There’s a complete lack of quality swing trade set-ups, and several breadth indicators have been diverging from the underlying price action. The AD line and AD volume line have been declining for two weeks…the percentage of stocks above their 20- and 50-day moving averages has reached elevated levels…the put/call has curled up. None of these spell doom for the market, but in the near term they tell us continued strength is no supported, and some sort of correction is likely until the charts and indicators can recycle. There’s a time to be aggressive and a time to be conservative. I’ve been conservative for since two weekends ago.
If you’re bullish, don’t fight a pullback. It’ll give you a chance to buy some quality names at lower prices.
Don’t force things…don’t be a hero. More after the open.
Stock headlines from barchart.com…
Allergan (AGN +3.53%) dropped 22% in pre-market trading after the U.S. Treasury Department said it will introduce regulations to make it more difficult to engage in a tax strategy known as “earnings stripping,” which enables U.S. subsidiaries to curb their tax bills as interest payments to their foreign parent companies are tax deductible.
Tesla (TSLA +3.96%) slipped 3% in pre-market trading after it reported Q1 deliveries of 14,820 vehicles, below consensus of 16,000.
Fifth Third Bancorp (FITB -0.30%) was downgraded to ‘Market Perform’ from ‘Outperform’ at BMO Capital Markets.
Hormel Foods (HRL -0.82%) was downgraded to ‘Underweight’ from ‘Hold’ at BB&T Capital Markets.
Northrop Grumman (NOC +0.43%) was rated a new ‘Buy’ at Guggenheim with a price target of $226.
General Dynamics (GD -0.49%) was rated a new ‘Buy’ at Guggenheim with a price target of $153.
Raytheon (RTN +0.80%) was rated a new ‘Buy’ at Guggenheim with a price target of $144.
Disney (DIS -0.39%) dropped 2% in pre-market trading after COO Thomas Staggs said he will step down next month.
Starbucks (SBUX -1.26%) was rated a new ‘Buy’ at Evercore ISI.
National Instruments (NATI -0.37%) slumped 10% in after-hours trading after it lowered guidance on Q1 adjusted EPS to 14 cents-15 cents, well below consensus of 23 cents.
Dominion Resources (D -1.07%) lost over 1% in after-hours trading after it announced a 10.2 million share secondary stock offering.
United Continental Holdings ({=UAL said it had reached tentative agreements on new contracts with its nearly 30,000 International Association of Machinists & Aerospace Workers (IAM) represented employees.
Dunkin’ Brands (DNKN -0.19%) fell 2% in after-hours trading after it was initiated with a ‘Sell” at Evercore ISI with a price target of $39.
Parsley Energy (PE -1.27%) dropped over 1% in after-hours trading after it announced a 16 million share offering of Class A common stock.
Earnings and Economic Numbers from seekingalpha.com…
Today’s Economic Calendar
1:00 Fed’s Evans: Monetary Policy
8:30 Gallup US ECI
8:30 International Trade
8:55 Redbook Chain Store Sales
9:45 PMI Services Index
10:00 Job Openings and Labor Turnover Survey
10:00 ISM Non-Manufacturing Index
Today’s Earnings here
Other…
today’s upgrades/downgrades from briefing.com
this week’s Earnings
this week’s Economic Numbers