Well, yesterday, I decided to no longer just be in this bear camp, but I am pretty neutral ready to throw myself to the wind on day to day movement. Today, I am sitting back in the bear camp, but it is just a one day thing. The spark is the ADP Employment Change, which showed that 371,000 private sector employees lost their jobs in July. It was higher than expected and is a precursor to Friday’s numbers. The futures were just slightly lower at 8:10 AM going into the report at 8:15 AM, but the futures have dropped much more since that report. I don’t think this is like yesterday because there was still some good news to buoy the loss in consumer spending.
Today, at 10:00 AM we still have those ISM non-manufacturing index and factory orders. This, though, are much lower rated economic data compared to the employment change vs. the consumer incomecompared to pending home sales. Other reasons to be worried are that while P&G narrowly beat expectations, the futures are down on a profit drop. In Asia, today, the market opened slightly higher but receded throughout the day. This was due to what analysts commented was profit taking, investors pricing in higher than expected earnings, and awaiting jobs data. To me that is a red flag…at least for today. Some weak earnings came in from bigger institutions, such as, Transocean, Boyd Gaming, and Marsh & McClellan. For these reasons, I am ready to take two short sales for today’s market.
The short sale I am more excited about and will place in the usual Buy Pick of the Day is…
Short Sale of the Day #1: Orbitz Worldwide Inc. (OWW) – Welcome to the world of jumping 16% in one day going into earnings and topping out. Orbitz did beat earnings, hitting a profit of $10 million by cutting costs, while watching a revenue drop of 19%. However, the company hit an EPS of 0.12, while analysts hit -0.06. Those are definitely great earnings, and I realize that. However, with the way the stock worked going into earnings, I think that beat was priced in when Expedia released earnings. The company has jumped over 50% in five trading days. The stock will gap up going into the morning for sure, and it may end in the green. Yet, the way the stock has moved up, I expect…