Wow this market is so schitzo!
This morning Europe had a pullback (Asia is closed) and our futures are way down already on no particular news. I suppose the ongoing Iran situation is weighing on investors.
None of the indices look in any danger of breaking technicals today but those may be famous last words. Rates are calming, which does give me some hope.
Oil is hovering around $75, which was a serious top on 4/24 but looks beatable this week. I am concerned that this is a bad psychological level for the markets if broken. The markets were fine with $75 oil on the 24th but crashed with the oil sector when oil pulled back to $73 on the 25th (but markets rebounded the next day).
Gold is $675 in Europe and if it doesn’t turn here we may be looking to test $700 by the end of the month.
Lots of earnings still coming in. So far, 65% of the companies reporting have beat and only 15% have missed, that’s very, very good.
ADBE is killing the Nasdaq with a revenue warning which it is blaming on weakness in North America and Europe but I think it may be more specific to them and the inflated expectations they have been getting.
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PG had a slight miss on revenues but raised guidance slightly, it will be telling which direction this one goes as it is a major market component selling way below it’s pre-warning highs of $62. If it is punished I will be very concerned about the overall market.
DVN missed estimates, blaming hurricanes and that excuse still works as the stock is up anyway. I’ll be looking at the $65s for $1 if the energy sector is up again today.
The better Devon does today the more I like SUN Jun $90s for $2.15.
MRK got more bad news as Vioxx may cause heart attacks after just 2 weeks. I like the Jun $32.50 puts for .35 as a risky but possibly high reward play.
FDX got a downgrade today, just as it looked about to break up (what a coincidence!). If the markets are going down and oil is going up then the $115 puts for $1.30 may make a nice momentum play but it’s a great stock and I’m not wild about a short position in general.
TWX had flat earnings but a 59% rise in net but may have a tough time breaking the 200 dma at $17.60.
Finally someone besides me likes MOT! BAC just raised them from neutral to buy. They are generally idiots but I’ll take what I can get on this stock…
QCOM raised guidance on strong orders for the quarter, it will remain to be seen whether this will be seen as a negative or positive for NOK and MOT.
Speaking of analysts, Credit Suisse raised their target on TXN to $64, interesting as the stock is currently at $34 but I certainly agree with the sentiment! I don’t know if this will lead to a quick reverse but the Jul $35s for $1.55 can be eased into with the expectations that the stock may trend down to $32 before really turning.
BIIB was a good pickup on Friday as the $45s are now $1.75 (up 50%). I am concerned about the 50 dma at $46.50 and am ready to exit just in case but I will be looking to buy the Jul $50s for .80 as a trade off.
ADP (7/27) has been posting very solid growth but is getting no respect. Very solid job creation can only mean more business for them so I’ll gamble on the Aug $50s for .30. They just had a disappointing quarter on 10% revenue growth because it costs money to add new employees but once they are on payroll, costs drop dramatically.
YHOO should get a great boost from rumors that MSFT will buy a stake in them to take on Google. This is a much better idea than MSFT being player #3 so it should get some legs and the YHOO $32.50s were just .55 yesterday but should open around .75.
