THURS. OCT. 23- So, When Does The FIscal Year End?

Halloween or perhaps the approach of Halloween may well cause the advent of more than a few tricks for the market. The key reason for this is that most mutual funds base their fiscal year-end on October 31. Most people do not know why; here is the reason: mutual funds are required by federal law to distribute, prior to December 31, the net capital gains realized through October 31. The federal tax law actually imposes an excise tax on amounts not distributed by said mutual funds. Thus, this leads to one thing that happens every year much less one thing new to fiscal 2008. What occurs every year is window dressing. Funds do not want to show losers on their accounts yet they also don’t want to show losing positions. Thus, what often occurs the last few days of October is that winners are sold to lock in performance whereas the losers are propped up to lessen the decline. It is all one big game which has gone on since your friends at the Fed decided this was wise tax policy. What is different in calendar 2008, however, is that a lot of investors want to cash out. They just do not want to be invested anymore- first it was the ‘smart’ money like the Blackstone Group (BX) which debuted at the height of the hedge fund frenzy. Then, it was the hedge funds which have caused massive havoc with all markets. Finally are the plebians who just cannot take it anymore and/or have been margined out. This is where we are now. So, the markets will vacillate wildly between now and month’s end on the forces of mutual funds trying to shore up their performance yet everything and everyone else conspiring against them.

Markets throughout Asia were pummeled which followed through to Europe. Futures initially were very strong overnight but have come all the way in. With no major news out and worries abounding, look for choppy trade. There will be more selling at least initially. From there, there will probably be a small rally after the thrashing of the last couple of days. After that, keep your eyes peeled to bonds, oil, and the dollar for direction.


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-

AMGN- beat and raised guidance

BIDU- beat, but lukewarm guidance

ADS- solid earnings

NE- great earnings

FFIV- great earnings

CTXS- fantastic earnings

CMG- good earnings and announced a buyback

TSCO- good earnings

BG- raised guidance

NOV- good guidance

BMY- solid earnings

DO- beat earnings

DOW- CEO steadfastly optimistic

FLIR- good earnings

LLL- good numbers

RTN- beat earnings

TRA- amazingly good numbrs

WCC- beat and raised

ALXN- beat and raised guidance

POT- good numbers


Bad-

AMZN- atrocious earnings warning

ALL- terrible earnings, but stock bounced a little after-hours…may be strong today if market good

LRCX- bad earnings

NTRI- warned on its outlook

DDR- continued weak; if it opens higher, looking to short thru unch otherwise A-B-A2 in either direction

ISIL- missed earnings

STX- terrible earnings warning

LXU- painfully weak; looking to short through yearly/daily low of 8.20

WFMI- closed weak

FMCN- followed through on Tuesday’s poor performance with more downside yesterday

SGR- closed just off a multi-day low

TXT- closed near a low

WYN- closed at its low

AEM- stunningly down almost 50% in days; looking for an A-B-A2 reversal if commodities bounce

BDK- warned

HOT- warned

JCI- warned

UNP- disappointing earnings

PLD- warned




Earnings list:


THURS OCT 23 BEF

ALK AMTD AVT

BC BDK

BG BHE BMY

CBE CCE CELG

DLX DO DOW

ECA ECL ELN

EME EQT

ESI ESV FLIR

GR HOT JBLU

JCI JNS KMT

LH LLL LLY

LTM MO NCR

NCX NIHD NOV

NYT ORI PCZ

PDS PFS PLD

POT RGC RSH

RTN RX SO

STI TMO TNB
TRA UNP UPS
WCC XEL XRX



THURS OCT 23 AFT

ARBA BNI BUCY

CAKE CB CMO

CPX CYN

DDR DECK DST

DV ELX EMN

FII IBKR IM

JNPR MCHP MPWR

MSFT OLN PKI

RIO RMBS ROP

RVBD SNV SYNA

TRMB VAR WDC

WFR WOOF YRCW

ZMH AFL BEN

ARG AFFX EMN



Good luck today.

www.protradingnetwork.com
.