Asia came back with a vengeance with 200 pt gains on the Nikkei and Hong Kong and Europe is looking up as well so it will be up to us to poop the party today.
Notes have pulled back a bit as economists are agreeing with me that Bernanke sounded sensible rather than hawkish yesterday and continued strong earnings from many sectors should not be ignored (but have been).
Hovnanian cut forecasts 10% which will put a damper on the building sector but the lowered expectations are still an improvement over last year’s record numbers and HOV is already trading at last year’s lows, today they will be just above 2004’s low of $30 – this is just silly!
Oil is on the March with more rhetoric out of Iran as their oil minister predicts $100 oil by winter (why wait?) and metals are, of course, keeping pace.
I’m still very iffy on the market but hoping for a strong rally today. Keep your eye on the 30 year as any move over 5.20% will be a bad signal for the markets. The dollar will continue to drop against the yen this week as a Japanese holiday leaves the dollar with no buyers on that side of the Pacific.
Intel needs to lead a SOX rally for us to really get things going otherwise any moves we see may be very short lived.
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JOE also cut forecasts and, with a p/e of 33 vs. HOV’s 5 (maybe 4.5 today) I think this one does have room to drop. It’s a Cramer stock, which means a lot of people are in it but don’t know why so it could drop fast on a turn in sentiment. The $55 puts are $1.50 for a momentum play but I’m staying out of this one.
I will be looking to pick up HOV Aug $40s for $1 as it drops today but I won’t pay more.
DHI will sell off too. Even though they have forecast solid growth this year, no one will believe them today so I will be looking to pick up Aug $30s for $1.50 but I will consider up to $2 if it doesn’t come down.
These builder plays are small positions as I may have to double down as they could easily drop another level before recovering!
More shame on American car companies as Volkswagen’s net profit is up 400%! You can only buy shares in Europe but it’s just another example of how GM needs to stop whining and start making good cars!
http://online.wsj.com/article/SB114621345362338633.html?mod=earnings_primary_lsc
VZ almost had my favorite kind of earnings – they sound bad but are OK (not good). I am happy with my calls but I won’t be adding to the position.
SIRI had a beat, a huge beat if you don’t include Howard Stern’s $225M stock grant with revenues tripling from last year. 4.1M subscribers is still a ways from break even so it will be interesting to see how the market reacts to this.
ATI is back on the move and the $75s have dropped to $1.15. AIR also got oversold a bit and I like the $30s for .50. Watch BA for direction on both of these, of course.
MOT Jul $22.50s are .70 and, although MOT may drop some more, I have to start buying a little here as last May – Aug the stock gained 60%!
http://stockcharts.com/h-sc/ui
TASR had yet another lawsuit dismissed but I’d like to see the stock break $11.50 before I jump in again.
TAP had a big disappointment and blamed rising costs so BUD may get sold off after its nice run. It’s a very slow mover so I like the $45 puts for .75 with a stop at .60 in case it goes the wrong way. This is a quick trade as I love this stock and hold leaps!
XOM $65s should open around .50 and make a good momentum play as long as the Valero Rule approves.
