WED. JUN. 18 THOUGHTS

It’s back to the theme of oil and Lehman (LEH). Yesterday, oil prices were weak for the bulk of the session, but the equities market failed to react to this development largely due to the renewed vigorous decline in the financials. When Goldman Sachs (GS) in particular posted solid numbers and could not stay positive, it helped to lead the rest of the financials down. Universally, the banking group was the worst sector in the market. Over and over and over again- this is going to be a theme for the foreseeable future. Watch oil and if oil is not really moving, keep your eye on LEH and the other financials. At this point, monitoring these two distinct things is the absolute key to the direction of the stock market intra-day.

Overnight, markets in Asia were higher as a group, but are down in Europe. Oil is quiet as are currencies and bonds.

FITB- announced huge offering in attempt to raise capital. Best trade of day may be pre-open; as of this writing, stock has held 10.90ish…want to short 10.85 for a 30-35 cent move…if it holds 10.90 into the open (without trading below there), there is a lot more than 35-50 cent potential.

FDX- terrible earnings. Low of morning thus far has been around 79.75. Looking to short below there.

MS- beat on bottom line earnings, but revenues missed making me (and many) wonder how they beat their earnings with such light revenues. Best trade of day here is probably pre-open as well in shorting just above 39. Post-open, it is an A-B-A2 of some fashion.

MF- massive share offering. Stock has largely held 11 this morning; it is likely a short below 11.

KMX- terrible earnings. A-B-A2 of some degree- likely to the short side.

GIS- pre-announced good earnings. It is an A-B-A2 as well probably to the upside.

LNN- terrible earnings. Best trade of day will likely be pre-open around 108 as it has been holding there; if it works, it will likely be a terrific short.

SOL- doing a share offering at 20.50. Should open below there. It is a buy above 20.50.

UNP- warned on earnings, but not horribly. It is a buy thru unch if it does not open down much.

ABAT/PDO/MCF/KAZ/RNN/NOEC/SPIR- all closed at or near their highs yesterday. If they open down in a presumed weak market, any of them are buys thru unch.

LINE/BEZ- featured on Cramer last night

PNRA- pre-announced to upside; likely an A-B-A2

Good luck today.