TUES. OCT. 14- Danger In Iceland

For those who haven’t avidly followed anything but domestic issues, the credit crisis without a doubt has had worldwide implications. For a little color, read below:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aVFtDRGwcc50&refer=home

Ostensibly, the credit crisis is particularly hitting many smaller nations very hard. In the case of Iceland, it just made cripple the entire economy. The Icelandic krona is rapidly devaluing to the point whereby the nation is having a brutal time importing anything. The nation waited and waited and waited to do something about their problems and the stasis may have cost the formerly prosperous nation its very viability. The Icelandic stock market, after a several day halt, opened down a whopping 76% this morning. The secret as discussed yesterday has been in opening up both interbank loans as well as nationalizing banking systems. Again, we are all free market believers, but it is a must to be pragmatic at this point. By seizing control of the banking system, Britain for instance gave credence –and confidence- to their citizenry’s banking system. In Germany, the government set aside the equivalent of $1.8 trillion of something quite similar. As long as everyone is on board, the worst is over…the question of course as we look forward is: is everyone on board with the exact same ideas with the exact same monetary considerations in mind?

Overnight, markets across Asia and Europe continued their rally amidst some more details of the U.S. plan to end the crisis. Markets should open sharply higher once again today. In all likelihood, there should be some profit taking after the huge run-up so look to short weakness, i.e. if the Dow opens up 250 and XYZ only opens up 20 cents, be looking to short XYZ thru unch if the market sells off. However, if there is no sell-off the first half hour, the rally will likely continue unabated catching more shorts off guards at least until mid-afternoon.

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 based on direction of the market unless specified


Good-

C,WFC,JPM,BAC,MS,STT,GS,MER,BK- government planning on buying preferred stock in all companies; all should be higher…if not, short thru unch particularly pre-open

XL –stormed higher; looking for A-B-A2 to upside, particularly above yesterday’s closing 7.76 high

PBR- rallied 2 on close; looking to buy above 34 or short it at 34 or below if it opens north of unch

TSO- looking for continuation buy north of 11 if market rallying

XOM, CVX, COP, MRO, APA, DVN, HES, SII RIG, BHI, SWN, BTU, ACI, ENER - looking to fade open one way or another after its incredible moves last few days

FCX- gigantic rise in the copper producer; looking for A-B-A2 on strength or short if it opens higher and goes unch…ditto other metal entities like AA

AAPL, RIMM, AMZN, GOOG- big-cap tech very strong yesterday; looking to short pockets of weakness…looking for A-B-A2 to downside when/if market weakens

Bad-

NWY- very weak ;looking to short thru yesterday’s low around 4.05

WYNN- warned last night; look for weakness in all casino stocks including MGM/LVS

Pep- warned slightly on earnings guidance

Earnings-

TUES OCT 14 BEF

ADTN .35/136M .33/133M 1.28/520M 1.43/563M

DPZ .21/337M .28/451M .91/1.46B 1.04/1.49B

GAP -.32/2.22B -.36/2.18B -.86/9.63B .22/9.72B

GWW 1.53/1.80B 1.49/1.73B 5.92/6.94B 6.48/7.35B

JNJ 1.12/15.70B .96/16.51B 4.51/64.83B 4.72/66.12B
PEP 1.08/11.19B .92/13.33B 3.74/43.71B 4.13/46.76B

PII 1.10/563M 1.11/550M 3.46/1.96B 3.89/2.04B

PKX ? ? 10.62/28.10B 10.31/28.20B

SVU .69/10.11B .64/10.21B 2.95/44.99B 3.01/44.84B

TUES OCT 14 AFT

ALTR .30/355M .30/363M 1.19/1.41B 1.29/1.53B

CSX .94/2.91B 1.04/2.95B 3.66/11.49B 4.45/12.34B

DNA .89/3.36B .90/3.49B 3.46/13.15B 3.94/14.25B

INTC .34/10.27B .40/10.87B 1.26/40.26B 1.45/42.50B

LLTC .45/311M .45/315M 1.84/1.27B 2.03/1.39B

USNA . 60/112M .64/117M 2.32/439M 2.56/476M


Good luck today.

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