THURS. OCT. 30 - Our Partners Overseas

Among the original non-interventionists were Thomas Paine and George Washington. George Washington was not an isolationist, but again, he was a non-interventionist in that he rejected protectionism but wanted the embryonic U.S. to stay out of political matters with foreign nations in warning of “entangling alliances.” Keeping politics out of this in focusing on economics, the world is as entangled as it ever has been. And that certainly applies to the world’s stock markets. More than ever, the wave of problems in Iceland or the failure of the carry trade in the Japanese yen by the hedge funds affects the domestic equities markets dramatically. Two major points here for day traders: First, markets throughout Asia and Europe rallied dramatically more over the last few years than did domestic markets. Thus, the net changes on any given day tend to be much more dramatic overseas than domestically. Many seasoned traders never pick up on this as a common refrain recently has been “if Hong Kong is down 12%, why aren’t we down 12%?” Well, the Hang Seng rallied 300% in four years so the ride down is that much scarier due to the steep ascent in recent years. The other major point here is that many times, we don’t know what the chicken is and what the egg is. Put another way, do foreign markets lead us or do we lead foreign markets? In dramatic times, the U.S. tends to be the leader because the rest of the world looks to us simply put. Thus, the U.S. market tends to be the first to rally after a major decline and vice versa. So, definitely pay attention to the worldwide markets as the impact on our market can be dramatic, but be very cognizant of the data upon which you use in making early morning decisions in particular.

Overnight, markets in Asia were up dramatically- about 10% to 13% across the board. The gains continued in Europe- 1% to 2% across the board. State-side, futures are up dramatically in an attempt to gain back most of the ground we lost yesterday afternoon on the GE rumor. Look for a relatively strong day today as well with a little narrower trading range as yesterday afternoon’s last minute sell-off evaporates.

Reiterating-If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified


Good-

FSLR- beat earnings and raised guidance slightly; STP, SPWRA, et al back in play today

MET- met earnings, but that is terrific in this environment

NLY- beat earnings slightly

AMP- decent earnings

CNX- strong all day yesterday

LVS, MGM- short covering spike yesterday; will be in play today

TGT- Ackman on CNBC this morning; will likely be a play before 8AM as he discusses it positively

WHRTD- announced reverse stock split; stock up a lot yesterday…very fluky, but will be a huge mover in all likelihood one way or another…will buy at 4ish if it opens below there and rallies

SPLS- announced positive earnings

ENR- good earnings

ICE- good earnings

SGR- good earnings

OIS- good earnings

MOT- great earnings

MYL- great earnings

OI- solid earnings

CI- decent earnings

OCR- raised guidance

XOM- beat solidly on earnings

FR- solid earnings

Bad-

V- beat earnings slightly, but stock traded lower after-hours

CME- beat earnings slightly, but getting hit anyway

PRU- missed earnings

BGC- poor guidance

SYMC- warned on balance of year

MUR- beat on qtr, but warned on year

CGNX- warned on next quarter

EQR- beat slightly on quarter, but warned slightly for next quarter

BBBB- warned on quarter

BRKR- closed on low

VOCS- closed on low

CAH- weakest of the weak healthcare stocks yesterday

SPW- closed near a low after posting poor earnings

MTW- very weak yesterday

ELN, BIIB- announced a 3rd brain ‘mitigating circumstances’ issue with their joint drug

MAS, TRN- cautionary notes on both on “Mad Money” last night

WFR- CEO resigned

AVP- bad earnings

APA- missed, but beat whisper number

ENER- was way up last night, but downgraded this morning

Earnings list:

THURS OCT 30 BEF

ABC APA AVP

BCO BJS BLL

CAM CBS CI

CL CMC CTL

CVS D DBD

EK ENDP ENR

EXPE FAF GNK

HSC ICE IGT

IP ITG JAH

LINTA LZ MOT

MRO MYL NVO

NWL OCR PAG

PDE PTEN SCG

SGR TE TRW

WMI WYN XOM



THURS OCT 30 AFT

ACS AKAM BARE

BMC CHK CPT

CTX DNB ELY

ERTS ESRX FBN

IDCC KLAC KND

MCRS MEE MFE

MHO MIL MNST

O OII OSG

PSYS SBAC SGMS

SPN SQNM SWN

THOR TSRA UNM

VSEA WRI WYNN



Good luck today.