Not much has changed since the recent article on Thursday pondering whether we will see a volumeless rally or the start of a new downtrend. With a shortened week due to the holidays and recent market uncertainty growing, I have far less to cover this week.
Friday did not see a bounce attempt like many had hoped for. Instead, it was a very boring day with action that felt like it was just blowing in the wind. The Super Committee has until Wednesday to strike a deal, but now it appears they may admit on Monday that they have already failed. We have a $1.4 trillion dollar deficit and they couldn’t even agree on cutting $1.4 trillion over a ten-year span, which is very sad. This may prompt more ratings downgrades which may be very market unfriendly. I don’t know how strong the bulls will be when those downgrades happen. We could see a small correction or a larger one over a few days. Many sense that QE3 is moving closer to being initiated and those potential downgrades may assist in that happening. The amount of uncertainty is growing.
As I’m typing this, futures are down about 1%, but action is so volatile lately that by the time we actually open Monday, we could be flat or in the green. Right now my strategy is to keep high levels of cash and tight leashes on any trades. I’m going to continue sorting through stocks looking for potential plays that I can move fast on whenever the action looks safer. As of right now, I do not plan on making many moves this week as the fear of holding overnight is growing riskier once again. If I make any moves, it will likely be after the Super Committee announcement or simply raising more cash.
Even with a shortened week, we still have some important economic data coming out (see economic calendar below). A large focus will be on GDP and the FOMC minutes coming out Tuesday. Durable Orders and Michigan Sentiment will be key data on Wednesday.
| Date | ET | Release | For | Actual | Briefing.com Forecast | Briefing.com Consensus | Prior | Revised From |
|---|---|---|---|---|---|---|---|---|
| Nov 21 | 10:00 | Existing Home Sales | Oct | 5.00M | 4.85M | 4.91M | ||
| Nov 22 | 08:30 | GDP – Second Estimate | Q3 | 2.3% | 2.5% | 2.5% | ||
| Nov 22 | 08:30 | GDP Deflator – Second Estimate | Q3 | 2.5% | 2.5% | 2.5% | ||
| Nov 22 | 14:00 | FOMC Minutes | Nov. 2 | |||||
| Nov 23 | 07:00 | MBA Mortgage Index | 11/19 | NA | NA | -10.0% | ||
| Nov 23 | 08:30 | Initial Claims | 11/19 | 400K | 391K | 388K | ||
| Nov 23 | 08:30 | Continuing Claims | 11/12 | 3650K | 3620K | 3608K | ||
| Nov 23 | 08:30 | Personal Income | Oct | 0.3% | 0.3% | 0.1% | ||
| Nov 23 | 08:30 | Personal Spending | Oct | 0.5% | 0.3% | 0.6% | ||
| Nov 23 | 08:30 | PCE Prices – Core | Oct | 0.1% | 0.1% | 0.1% | ||
| Nov 23 | 08:30 | Durable Orders | Oct | -1.0% | -1.0% | -0.6% | -0.8% | |
| Nov 23 | 08:30 | Durable Orders -ex Transportation | Oct | 0.3% | 0.0% | 1.8% | 1.7% | |
| Nov 23 | 09:55 | Michigan Sentiment – Final | Nov | 63.5 | 64.2 | 64.2 | ||
| Nov 23 | 10:30 | Crude Inventories | 11/19 | NA | NA | -1.056M |
Below is the stock radar to start the week. I’m attempting to keep my eye on stocks which showed relative strength over the past few bearish days.
AMAG Pharma (AMAG)
Antares Pharma (AIS)
Cerus (CERS)
Ebix (EBIX)
Cedar Fair (FUN)
Global Cash Access Holdings (GCA)
GSI Group (GSIG)
Healthstream (HSTM)
Idenix Pharma (IDIX)
Jaguar Mining (JAG)
Kodiak Oil (KOG)
Cheniere Energy (LNG)
Mentor Graphics (MENT)
NovaGold Resources (NG)
Oncothyreon (ONTY)
Procera Networks (PKT)
Raptor Pharma (RPTP)
TASER International (TASR)
As always, do your own homework to see if you agree. Good luck out there.
Mike
No positions in mentioned stocks
