Whee, what a ride!
We went up, we went down and then we went up again and we had fun doing it but, after taking out callers in the afternoon, we were forced to re-cover at 3:37 which kept us very busy right into the close. Non-members can take a look at the day's action on the free site as part of this month's promotional leading up to the weekend announcement regarding new services.
The nice thing is, that saves me reviewing it and we can talk about what I didn't like about the run. A) It was forced, led by popular momentum stocks in a pointless burst of buying. B) It was narrow, same thing but really a lack of confirmation from the broader indices C) It was on low volume, down 20% from yesterday. D) If we throw out the closing spike we were at 13,450, just 100 points above the non-spike bottom and 300 points below the non-spike triple top we put in prior to the fall – a 25% bounce is certainly nothing to get excited about and the Dow was our BEST performer.
Oil is still around $92, the dollar is still weak, gold is still strong, inflation is out of control and we have the CPI coming up tomorrow, which was (if you believe the lies) just 0.3% last month (Oct.) when oil was $83 a barrel so what do you think is going to happen in a November report with oil at an average of $95? Really I don't see why they thing this forecasting stuff is so complicated. Not only was oil up in November but housing prices made a small recovery and the meltdown in home values was a big contributor to keeping a lid on what our government laughingly calls our key inflation indicator.
We're also going to get Industrial Production, which was negative last month and should improve, as well as Capacity Utilization, which should be flat as productivity was way up as were inventories last month. Next week we get a ton of exciting (well to me, anyway) data to look at on the Briefing.com calendar:
| Date | ET | Release | For | Comments/Expectations | Consensus | Prior |
|---|---|---|---|---|---|---|
| Dec 17 | 08:30 | Current Account | Q3 | In ONE MONTH?!? | -$183.0B | -$190.8B |
| Dec 17 | 08:30 | NY Empire State Index | Dec | That's a nasty drop | 21.0 | 27.4 |
| Dec 17 | 09:00 | Net Foreign Purchases | Oct | We just had a terrible auction | -$26.4B | |
| Dec 18 | 08:30 | Housing Starts | Nov | Expecting down 10%! | 1190K | 1229K |
| Dec 18 | 08:30 | Building Permits | Nov | Look for downside surprise | 1150K | 1170K |
| Dec 19 | 10:30 | Crude Inventories | 12/14 | Such a joke | NA | -722K |
| Dec 20 | 08:30 | GDP-Final | Q3 | Yeah, right! | 4.9% | 4.9% |
| Dec 20 | 08:30 | Chain Deflator-Final | Q3 | 5% growth and no infaltion – wow! | 0.9% | 0.9% |
| Dec 20 | 08:30 | Initial Claims | 12/15 | NA | 333K | |
| Dec 20 | 10:00 | Leading Indicators | Nov | This could move us down if bad | -0.1% | -0.5% |
| Dec 20 | 12:00 | Philadelphia Fed | Dec | This could make it worse | 8.0 | 8.2 |
| Dec 21 | 08:30 | Personal Income | Nov | Optimistic | 0.5% | 0.2% |
| Dec 21 | 08:30 | Personal Spending | Nov | Possible with credit | 0.5% | 0.2% |
| Dec 21 | 08:30 | Core PCE Inflation | Nov | Do they even live on this planet? | 0.2% | 0.2% |
| Dec 21 | 10:00 | Mich Sentiment-Rev. | Dec | Polls have been turning down | 74.3 | 74.5 |
So I'm a little nervous about next week and, to top it off, we hear from the dreaded financial sector and many other market movers that will make or break the month as it's effecively over on Friday with just a few real trading days left in the year after that. By the way, selling the Jan puts and calls to people is fantastic as they are getting very few trading days for their money – likewise, owning the Jan puts and calls now is essentially tossing your premium from Dec 21st -Jan 2nd out the window as it's a string of low-volume, meaningless days. Our plan is to be 90% cash on Friday and have ourselves a merry little Christmas.
We have a really fun earnings week ahead of us as the year-end stragglers pour in and there should be lots of interesting plays to make with all that cash we have laying around!
Mon: ADBE (I'm considering a double diagonal)
Tues: BBY (got 'em), GS (got 'em), AIR, DRI, HOV (got 'em), NDSN (need 'em), PALM, TTWO (had 'em)
Wed: GIS, JOYG, ACN, MLHR (need 'em), ORCL (got 'em), PAYX
Thurs: AM, BSC (got 'em), CCL, CAG, DFS, FDX (will buy after the fall), MS (danger Will Robinson, danger!), PIR (are they still in business?), RAD, SCHL, WGO (I'm kind of liking them for an upside surprise), ASFI (will be intersting to hear what they have to say), COMS, APOL, JBL, MU (dude, where is my bottom?), RHT (need 'em), RIMM (got 'em), SHFL (got 'em), TEK
Friday: CC (got 'em) and WAG
We still need the energy patch to correct and bottom out the market before we can put together a real rally. Thus far they have held up stubbornly and we dumped our puts yesterday but hopefully we'll get a pointless rally today so we can short into the weekend as that party is over and the oil traders are just too drunk to know it.
