Today is the second day of the rest of the trading year.
Obvious isn’t it? It should also be obvious that one day does not a rally make. The next few days are critical and will set the tone for the year so let’s all hope that we can confirm yesterday’s move as volume comes back into the market today and tomorrow.
My concern for today is a huge rally in Asia using up investing capital, especially on the Nikkei which went up 250 pts on a short trading day. Gold is also climbing and the dollar is falling.
Oil is pulling back a bit into tomorrow’s inventory report and on a resolution in the Ukraine but colder weather almost guarantees prices will remain over $60 for the winter. A larger than expected drawdown tomorrow can push oil back over $65 which could cause all of these gains to be given back fast. On the other hand, a build-up could be just the spark we need to confirm a huge rally so just sit back and fasten your seatbelts because it’s going to be a wild week!
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Expect satellite radio to be back in vogue this week as Delphi is leading a charge into Europe for an estimated $750M project that will be much harder to organize than the US ventures due to language barriers and international regulations. The logic will be, if they expect to make money with that, then maybe SIRI and XMSR might not be such a bad idea.
BF offered an extra $1.5Bn for EC. I don’t think the price is justified so look for some weakness in BF.
LOW was cut by JP Morgan today and could take a hit.
HAL looks very strong, especially if SLB maintains it’s new high – we can expect HAL to follow suit and break $68. A Barron’s article on insider selling may hold this one back though but it looks to me like it was mainly option selling and not a reflection of company problems.
XOM got a BofA upgrade today to $65, a target I agree with. Even after yesterday’s big jump, expect a serious challenge of $60 today.
We may be late to the party but TRID looks solid for another move up after tripling last year.
CY did very well yesterday but may have a hard time breaking $15 due to 57,000 open calls at that level. If it does make it over $15.50, it should move right up to the next barrier at $17. The biggest factor will be the strength or weakness of SPWR which is driving CY’s value.
Apple faces a major test today at $75. It will take a strong market move to get it over and up to a new all-time high.
WFMI was not up yesterday – giving me some confidence in my short.
SNDK may have over-reached with a 7% gain yesterday.
Trade of the day is cash – this could still go either way!
Good trading,
– Phil
