WOW! I just lost my whole blog for the day!
Don’t even ask how stupid I was but I just can’t do it again right now so I will give a down and dirty summary.
Things don’t look as strong as I would like. Japan is on fire (up 569 pts) and I do have some concern as to how much of the world’s money will be left for US equities.
Also, the GDP was much lower than expected which is good if you want the Fed to pause but bad as it could signal a real collapse in housing.
Today is the day to get all those things we’ve been tracking this week if the Dow breaks and holds 10,850 (yes, I raised it) against this semi-bad news. Unless that happens – stay in mainly cash!
This could be the start of a Japan-style rally if we can get the press on board although they will probably cry bubble the second the Dow crosses 12,000.
The difference between the US and Japan is that, in Japan, they call a 40% rally a “recovery” and they say that 2-3% inflation is “healthy.” When the Japanese Fed raises rates, consumers say “oh great, now I will make more money on my savings account!”
http://finance.yahoo.com/q/bc?s=%5EN225&t=1y&l=on&z=m&q=l&c=%5Edji
Oil going over $68 will hurt us so watch out for that.
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BYD and MGM look very hot.
Steel stocks are in play. X has a p/e of 5, what’s not to love?
Stay away from builders until we know what the fed is doing although many are ready to take off on any good news.
PFE should have an amazing day. This was a 1/13 TOTD. If you are not in it you can take advantage of some early confusion about an approval to pick up the March $25s.
All that glitters will be our gold stocks if we hit $565. BVN is still the best looking if it can break up from $28. I think the whole group is being manipulated down at the moment. NAK is a great buy and hold even though it has run up a lot since we picked it.
XOM is already talking down oil prices. They sandbagged earnings last quarter to keep them down to “just” $10Bn but I think the number this quarter are going to give the anti-oil folks conniptions. I’m going to take the $62.50 calls for about $1.
GDT had poor earnings and poor outlook and BSX will suffer. How low can it go? Perhaps low enough to scuttle the deal… This is a good article summarizing what I have been saying since the deal was first announced:
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B3BA97FFC%2D3D5C%2D46AC%2DAA5F%2D9DACAE286959%7D
It’s gonna be a wild ride today – good trading,
– Phil
