{"id":7075,"date":"2013-10-11T07:27:07","date_gmt":"2013-10-11T12:27:07","guid":{"rendered":"http:\/\/leavittbrothers.com\/blog\/?p=7075"},"modified":"2013-10-11T07:27:07","modified_gmt":"2013-10-11T12:27:07","slug":"before-the-open-oct-11-4","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=7075","title":{"rendered":"Before the Open (Oct 11)"},"content":{"rendered":"

Good morning. Happy Friday.<\/span>
\n The Asian\/Pacific markets closed up across-the-board. Australia, China, Hong Kong, Japan and South Korea each rallied more than 1%. Europe currently leans to the upside. Amsterdam, Switzerland and London are doing the best. Futures here in the States point towards a positive open for the cash market.
\n<\/span>
\n The dollar is down. Oil is down, copper up. Gold is up, silver down. <\/span>
\n Yesterday was one of the market’s biggest up days of the year, and coupled with the previous day’s relatively long lower tail on its daily candle, the stage is set for a bottom to be put in place and a new uptrend to establish itself. <\/span>
\n I was thinking we’d get a knee-jerk reaction to the upside when the Washington finally agreed on the debt ceiling and budget (it hasn’t happened yet) that would be followed by one more move down. Then a bottom could be put in place. Then the market could rally to new highs. <\/span>
\n Given yesterday’s strength, I’m tempted to say if today is a decent day, there will be no test of the lows. A bottom is already in place, and new highs will be made later this year. <\/span>
\n This is how I’m leaning right now (if today is an up day). We’ll find out in the next couple days how much staying power yesterday’s move has. It certainly is characteristic of a bottom…or how bottoms are formed. Tops take time; they tend to be rounded. Bottoms form in single days and typically don’t give you a second chance to get on board once the trains starts moving. <\/span>
\n One thing that could keep a cap on things is the options market. There was huge call and put volume at SPY 168 yesterday. The stock closed at 169.17. If the market’s invisible hand doesn’t want those call buyers to make money on the weekly options which expire today, we won’t get a move up today.<\/span>
\n Long term my bias remains on the long side…this hasn’t changed in a long time. <\/span>
\n Short term…we’ll find out in the next couple days if the market intends on testing its low. <\/span>
\nStock headlines<\/strong> from barchart.com…<\/span>
\n JPMorgan Chase (JPM +3.49%) reported Q3 EPS ex-items of $1.42, better than consensus of $1.19.<\/span>
\n J.B. Hunt (JBHT +1.85%) was upgraded to “Buy” from “Neutral” at BofA\/Merrill.<\/span>
\n Deutsche Bank (DB +3.95%) was downgraded to “Underperform” from “Neutral” at Macquarie.<\/span>
\n Johnson & Johnson (JNJ +2.12%) was upgraded to “Neutral” from “Sell” at Goldman.<\/span>
\n BNP Paribas (BNPQY +3.48%) was upgraded to “Outperform” from “Neutral” and Societe Generale (SCGLY +3.86%) was upgraded to “Neutral” from “Underperform” at Macquarie.<\/span>
\n Pharmacyclics (PCYC +2.16%) was upgraded to “Buy” from “Neutral” at Goldman.<\/span>
\n Merck (MRK +0.47%) was downgraded to “Hold” from “Buy” and Eli Lilly (LLY +2.48%) was downgraded to “Underperform” from “Hold “at Jefferies.<\/span>
\n Southeastern reported a 4.8% passive stake in Wendy’s (WEN +2.58%) .<\/span>
\n Wells Fargo downgraded the Consumer Staples sector to “Underweight” from “Overweight” citing downward earnings momentum with U.S. consumer disposable income growth near 50-year lows and commodity prices on the verge of deflation.<\/span>
\n Safeway (SWY +2.50%) reported Q3 EPS of 27 cents, well ahead of consensus of 16 cents, and said that it intends to exit the Chicago market, where it operates 72 Dominick’s stores, by early 2014.<\/span>
\n Wells Fargo reported a 12.1% passive stake in Pike Electric (PIKE +3.18%) .<\/span>
\n Micron (MU +1.54%) reported Q4 EPS ex-gains of 20 cents, below consensus of 25 cents.<\/span>
\nEarnings and Economic Numbers<\/strong> from seekingalpha.com…<\/span>
\n Today’s economic calendar:
\n 8:30 Producer Price Index
\n 8:30 Retail Sales
\n 9:55 Reuters\/UofM Consumer Sentiment
\n 10:00 Business Inventories<\/span><\/span><\/span><\/span><\/span>
\n Notable earnings before today’s open: INFY, JPM, WFC<\/span>
\n Notable earnings after today’s close: none<\/span>
\nOther<\/strong>…<\/span>
\ntoday’s upgrades\/downgrades<\/a> from briefing.com<\/span>
\nthis week’s Earnings<\/a><\/span>
\nthis week’s Economic Numbers<\/a><\/span>
\n