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Daily State of the Markets Publishing Note: I am traveling Thursday and Friday this week. Thus the “Daily State” report will be published only if time permits. Good Morning. “Buy! No, Sell! No wait, did I say sell? I meant Buy! Yea, that’s right, Buy! Unless… Well… Ok… No, let’s Buy…. Yea, that’s my final answer! But wait… Maybe I should…” While it sound’s idiotic, this is the type of indecision that appears to have overwhelmed traders (oops, I mean the computers) of late. One minute Europe’s woes are back, contagion is spreading, the global banking industry is toast, China is going to bring down the world, and Apple (AAPL) is crashing. But the next – Wheee! – It’s all good, buy em! Although the bulls certainly won the round on Tuesday as the S&P 500 and DJIA appeared to break above their respective short-term high-water marks as well some of the moving averages that everyone on TV loves to yammer on about, I’m going to opine that the consolidation phase that began in the last month or so, remains intact. Sure, the bright green numbers were pleasant to see for anyone owning equities yesterday (my UPRO’s did bring a smile to my face). And as expected, AAPL bounced back with a vengeance, erasing the prior day’s entire shellacking with a pop of +5.1%. But seriously, how long can we expect a move to last in this market that has no memory? One day? Two? The bottom line is that the uncertain market environment may continue given that it is earnings season once again and an options expiration week to boot. For example, no sooner had the NYSE’s closing bell sounded Tuesday than first Intel (INTC) then IBM (IBM) missed earnings. Then we heard that Warren Buffett has stage 1 prostate cancer and thus, Berkshire Hathaway (BRK.A) could be at risk. So, will the boyz and their computer toys focus on selling those names today or will something else bright and shiny attract their A.D.D.-driven fancy? Then there’s the situation in Europe. A friend of mine continues to be fixated on all the minutiae happening in Europe these days. As such, I’m treated to an almost daily dose of the bad things that could happen on the continent. What my friend is missing though, is the idea that markets don’t care about issues until they do. And right now, nobody cares all that much about Europe. But, given that I like to keep an open mind with regard to anything and everything that might get the attention of the algo’s, I will admit to fearing another bout of d?j? vu all over again (again) should yields in places like Spain, Italy, or France really start to spike. The bulls argue that Europe is “so last year” and that the earnings from companies like Coca-Cola (KO) were the focal point on Tuesday. After moving sideways for the better part of last year (at least from a weekly chart perspective), KO has taken off recently on word that the company is seeing higher sales volume as well as… wait for it… improving pricing power around the world. Frankly that sounds pretty good. And in this sector, Monster (MNST) seems to be doing pretty well too, have you seen that chart? My point this morning is that unless one of our two teams can grab the reins in the near future, the d?j? vu all over again (again) situation where stocks are up one minute/day and down the next is likely to continue. We’re likely to see more volatile days as the computers all run the same trades at the same time on the latest and greatest data inputs. So, how does one play this type of environment? Personally, I like to lean on market models and rules-based strategies. However, if you like to play things by ear and make decisions as they come, take out your electronic rulers and draw horizontal lines on the S&P 500 chart at 1420 and 1360. In short, until the market can make a pronounced move above or below those lines, we just might be stuck in this d?j? vu phase. Turning to this morning… After a strong day in the U.S. markets yesterday, what should we expect today, you ask? Oh, that’s right, a down day, of course. In short, Europe is down 1% or so on concerns about Spain, which is driving our futures lower. In case you haven’t picked up on the pattern, the U.S. futures follow the European markets in the early going. On the Economic front… There is no economic data scheduled for release today. Thought for the day… Learn to trust in an idea whose time has come… Pre-Game Indicators Here are the Pre-Market indicators we review each morning before the opening bell… !========>
Positions in stocks mentioned: AAPL, IBM, UPRO, MNST For more of Mr. Moenning’s thoughts and research, visit StateoftheMarkets.com !========> The opinions and forecasts expressed herein are those of Mr. David Moenning and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations. The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of StateoftheMarkets.com and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. One should always consult an investment professional before making any investment. Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided. The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed. The information contained in this report is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer. Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice. Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results. !========> |
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