WED. JUN. 25 THOUGHTS

Building a bit on the theme of yesterday, just as a torrent of news can affect stock prices, a paucity of news can affect stock prices just as well given the circumstances. Often-times on Tuesday mornings in particular after a bad Friday and a neutral/bad Monday, a rash of margin calls can be issued as Tuesday morning progresses. Furthermore, people tend to wait on bad news to come; well, Tuesday post-open is not typically a time that news is leaked about much of anything. So, after getting absolutely drilled for a few days, the selling pressure began to dry yesterday morning in the financial sector, at least in the immediate-term. Thus, a number of entities- whether people or funds- began to cover their shorts. If a major fund was short, say, 100,000 shares of Citicorp from the middle of last week at 21 and no news has come out between the end of the week and a Tuesday morning, what often happens is that the fund takes a little if not all of the position off simply because no news has occurred. And a vacuum of buying is created as a few shorts cover and some bargain hunters come in- simply because nothing bad happened and sellers have stopped selling. Thus, stocks like C rallied from 18.40 to 19 and STI from 35.50 to 37.50 in a mere 20 minute time span yesterday morning. Things like this often happen during this time of year- and these two weeks particularly. So, same as yesterday- go with the trend, but please be careful of sharp sudden countertrend moves.

Markets in Asia were quiet overnight, up in Europe on rumors of a UBS deal, and all other markets are quiet ahead of a Federal Reserve meetings this afternoon in which the Fed is almost unanimously expected to keep interest rates unchanged.

MON- beat earnings, but lukewarm guidance. If stock opens higher, it is an immediate short thru unch. Other than that, it is an A-B-A2

DRI- good earnings. Looking for an A-B-A2 to the upside.

PRXL- good earnings. Ditto. A-B-A2 to upside.

SLAB- broken record. Good earnings. A-B-A2 to upside.

OII; GTI- on Cramer’s show last night.

KEQU- Very thin, but looking for short thru 11.30 when/if it gets there as 11.30 was yesterday’s low.

SONC- A-B-A2 of some sort; likely to upside. Company reported weak earnings, but stock has been notching higher from the depths of yesterday afternoon’s lows.

IPI;POT/other fertilizers- will likely track MON. Especially like a countertrend trade here/relative strength type action, i.e. if MON is trading down, say, 2-3 points and IPI opens down a dollar, buy IPI thru unch.

After-hours to monitor: BBBY, NKE, ORCL, RHT, RIMM all out with earnings.

Relatively slim pickings. Good luck today.