MON JUN 23 THOUGHTS

This has the possibility to be one of the most interesting weeks of the year. Admittedly, the scheduled news flow (earnings and such) is going to be relatively slow all week and today of course is a Monday in June. But, the next leg of whatever financial crisis/panic the market is going to face is certainly underway. And this is the most dangerous phase of it because not only are most people not paying attention, most people are not cognizant of the real dangers out there. Stocks like Washington Mutual (WM), Downey Financial (DSL), and Ambac (ABK) are indicative of the washout in that all are approaching zero. Zero. On Friday, oil was up in the morning and dwindled down all day; the market ignored it. Full focus on financials. Furthermore, even a tiny whiff of good news is enough to spark short covering right now; witness the performance of Suntrust Financial (STI) on Friday afternoon when it popped 10% merely because they issued a statement indicating that they were not going to cut their dividend. We are approaching a phase where something is going to happen where people are going to stop and take heed. In the interim, it is a ripe environment albeit a dangerous one for day traders as financials are totally in focus right now.

Overnight, markets in Asia were slightly lower, but things shifted to a positive note over in Europe. The oil market ignored the Saudi increased production news in trading higher in the early going. There are a few mergers announced this morning, the biggest of which is in the agriculture sector with the futures indicated higher in the very early going. So, there is a firm tone and a seemingly ready environment for some quiet short covering today as long as no major news hits the financial sector.

BCE- up after they won a court appeal forcing them to indeed be bought out. Likely A-B-A2 here, preferably for a trader from the short side.

OCN, AGO, HRB, WTBA, XL- all weak on Friday; if they open higher and go negative, looking at all of them as short candidates

WAG- missed earnings by a penny; should open lower thus it is likely a buy thru unch.

HOO, JRCC, GCO- all strong on Friday; if they open down and go positive, looking at them as potential long candidates

BG/CPO- BG buying out CPO for $56/share. Looking to buy CPO above 56 (highly unlikely) because it’d imply a higher bid is on the way and/or some sort of A-B-A2 playing off of the strength in BG.

DMRC- received a cash offer for its main division. Looking at an A-B-A2, preferably from bullish side.

GDI/BQI- Cramer

DAN- weak on Friday; looking at it as a short thru Fri’s low

Not much newsflow; not the easiest morning to day trade. Good luck today.