TUES. SEP. 9- The Survival of The Fittest

Arguably one of the most famous refrains in history comes from the Declaration of Independence in which Jefferson stated that “all men are created equal.” This is mot certainly not the case in the stock market. There are two phases of this dichotomy yesterday. First, although the tone of the market overall was good with the headlines being that the Dow rallied, the tech sector underperformed by a vast margin. Investors realized that there was no major benefit (or detriment) to the tech sector from the FNM/FRE bailout as stocks like AAPL, GOOG, and RIMM all fell several percent on the session. Even more relevantly, there is a split in the financials. Stocks like Goldman Sachs (GS) were strong much of the day while Lehman (LEH) fell significantly. In all likelihood, this split will continue for the foreseeable future. For day traders, this makes things a bit more complicated for it’s not a matter of ‘the financials are moving as sector;” rather, it is even more individualized. So, just another little nuance to watch out for as you trade these next few weeks.

Little cautionary note: with stocks having closed in the middle of their range yesterday, it will be a little more tricky this morning; we like momentum- stocks near highs or lows and there are not a lot. So, tread carefully.

Overnight, stocks in Asia resumed their slide with most markets finishing down 1% plus. But, the decline did not spill over to Europe as the bourses there are up nicely as of this writing. Oil is down yet again as the latest Gulf hurricane seems to be taking a track a little further south and west than most forecasters prognosticated. Looking ahead to today, there will likely be some more strength at the open. The first half hour today is crucial; for day trading, look for stocks that are barely higher and look to short if momentum from yesterday fails to follow through. Conversely, the whole day may be an A-B-A2 to upside. It is very difficult to tell what will happen, but one of those two options will very likely play out.

Reiterating-If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 based on direction of the market unless specified

Good-

DELL- Michael Dell bought back $100 million of stock, showing confidence in the company

LRCS- announced major buyback

Bad-
CSE- Slashed their dividend…stock may actually rally if it opens well down as the firm is being responsible here in conserving capital

FUL- warned badly.

ABK- may not have an active market after all for their Connie Lee operations in the state of Wisconsin; the Connie opening is why the stock rallied last week

KIM, HIW- share offerings

JOYG,BTU,ACI,MEE,JRCC,SU,SWN,CNX,UPL,HK- among others; these are all energy stocks which closed near their lows yesterday…all due for bounce particularly if oil bounces


TUES SEP 9 BEF

PBY .07/515M .05/504M .17/2.02B .38/2.06B

TUES SEP 9 AFT

OXM .34/230M .66/269M 1.97/1.01B 2.26/1.05B

PAY ?/232M ?/238M ?/903M .92/946M

SHFL .10/48M .10/50M .23/185M .38/205M

Good luck today.

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