TUES. OCT. 28 - A False 'Rest'

“Seinfeld” references. Discussions of football games. Bad (and good) jokes. These are some subjects of discourse that have been ostensibly not noted in trading rooms across the country for the last several weeks…until yesterday. The market once again shook off horrible declines in Asian stock markets while the yen in particular strengthened as domestic equities failed to follow through – at least until late in the day when fund selling came back in. However, with the drying of the selling pressure has been a complete absence of investors waiting to say “me first” in plunging back into the stock market waters. Thus, what occurred was a sort of vacuum of action for a chunk of the day; a few brave souls dipping toes only to get them bitten by jellyfish so to speak. This type of action was gently hinted at with the last lane of the blog yesterday; there is change in the market in the immediate-term. People are conditioned to sell into any rally however thus with a relative dearth of buyers, prices could not really move a lot net-net yesterday. Will this continue? Who knows with any certainty. But the point today is the same as yesterday: this is a different environment all of a sudden – one way or another- so be attuned to increasingly whippy action on both sides as the market attempts to sort itself out ahead of the elections as the forces of a tidal wave of government money versus hedge fund selling become that much more of a vicious war. This will likely make yesterday's action a very very brief respite.

Overnight, markets finally bounced world-wide. Prices in Hong Kong bounced 15% with prices up sharply across Europe as well. State-side, futures are higher- all the way up to levels- wait for it- not seen since yesterday afternoon at 3:45PM. For today, we may well have that rally that was so anticipated yesterday. There will likely be a sell-off a some point as many investors/funds take the opportunity to sell, but it’d seem that if that sell-off isn’t aggressive, we should have a pretty good A-B-A2 upside day.

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-

ATHR- beat earnings slightly

CF- beat earnings and announced massive buyback

FIS- fantastic earnings

PCX- good earnings

RCI- good earnings

SCHN – great earnings

SII- great earnings

DFS, MA, V- massive settlement in lawsuit going to DFS

VLO- good earnings; CEO made comments about the stock being undervalued

Bad-

MTH- missed earnings horribly

PCL- beat on quarter, but warned on year

PRXL- warned horribly

BWLD- warned on its outlook

PLD- continues it decline; looking to short thru yesterday’s 10.40 low if it opens above there

SRZ- looking to short thru yesterday’s 3.34 low if it opens above there after it was weak yesterday

MS- weakest of brokerage stocks after Mitsubishi Bank says it may need financing; looking for a short thru unch if it opens higher

CCC- looking to short thru 10.10 if it opens higher

C.NA- closed on its low; looking to short thru 11.90 if it opens above

HIG- closed on its 19.77 low; would short around 19.75 if it opened higher

X, ACI- mentioned negatively on “Mad Money” last night; X posted earnings as well

AIV- broke to another new low

NXY- closed near its low

PPO- another REIT horribly weak

MMR- oil exploration company near a low

LBTYA- the media company keeps falling

BMR- closed near a low

TSN, SFD- among poultry companies closing at or near their lows while down substantially; industry in trouble as financing drying up

MFC- closed on its low

SLB- one of the weakest of the big-cap oil companies; broke to a new trend low on close

CI- among the weakest of the insurers in yesterday’s trading

MAS- bad earnings

WHR- warned; cutting jobs

Earnings list:

TUES OCT 28 BEF

ACH AMED ASH

BYD CHKP CP

CRS CVG EL

ETR FMX GPI

IPG KDN KSU

MAS MHP MLM

MSO OXY PCX

RCI RCL ROC

SAP SCHN SEPR

SII TIN UA

USG VLO VSH

WDR WHR X


TUES OCT 28 AFT

ACE AMX APOL

BBOX BEC BMRN

BXP CAI CBI

CEPH CPHD CMP

CTX DRIV DWA

FISV FLS FMC

FORM JLL LNC

MCK MOLX MTW

NETL NLC STM

URI VPRT WBSN

WLT WRB XRAY



Good luck today.



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