FRI. NOV. 7- Post-Election Fallout

Amidst a jump in jobless claims and terrible earnings across an array of industries, the stock market has now suffered its worst two-day decline in both the measures of the S&P 500 and the Dow since the stock market crash of 1987. Oil fell to a 19-month low as well. The $1.2 trillion loss in American stocks in the last two days has been breathtaking. The superlatives are endless with the exception of one. Namely, it has been the worst two-day start for stock prices bar-none following an election in the history of the American stock market. Mind you, these two days follow a huge rally for the market yet it clearly shows that the verdict of the market so far is that a lot of the hope we optimists have may not come to fruition. The worldwide economy is clearly in trouble right now and the balm of the Pelosi stimulus package seems like a band-aid which will do little for the economy- just as the first stimulus package did very little for the economy. Thus, it is apolitical as all politicians seem to be in a giving mood right now. With all of this said, the market is focusing on the problems of the economy, but is clearly also worried about what exactly we got in our president-elect economically. There is much uncertainty surrounding Obama’s thoughts on the economy much less his team of economic advisers. Clearly, however, these worries are not good for the market. So, two thoughts: first, the long-term ramifications of the rumors of what Obama wants to do are not liked right now by the market. But, second, for day traders- uncertainty is arguably worse than bad news. The sooner that Obama announces his plans and his team, the better for the market…which will likely spark a rally no matter what as stocks discount whatever is going to come out ahead of time.

Foreign markets rebounded overnight...this likely portends what will happen here today. Selling pressure ebbed yesterday afternoon and the jobs report seems to be factored in. There will likely be a sell-off at some point today, but with eveyrbody expecting the worst, the worst may well be already under consideration...so, look for an A-B-A2 to the upside...if the market is not up by noon though, it could get quite dicey this afternoon.


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 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified


Good-

NVDA- good earnings

VRSN- beat on quarter slightly

FLR- great earnings and raised guidance…amazing I nthis environment

ONXX- good earnings

FSYS- phenomenal numbers

DLB- good earnings

INT- terrific earnings

SD- decent earnings

TBSI- good earnings

FWLT, TUP – on “Mad Money”

LFG, FNF- LFG being bought out by FNF for .993 shares of FNF

Bad-

PCLN- beat on quarter, but warned on year; however ,warning not as low as whisper number

DIS- missed earnings and warned of slower bookings

QCOM- missed quarter and warned

GNW- bad earnings, canceling dividend and share repurchase program

IRF- bad earnings

BKD- finished near low amid rumors of liquidity crisis

PLD- closed near low

SVR- no bounce in closing near its low as well

DFT- same story; closed near low

LVS- very weak yesterday amid rumors of default

EXM,DRYS among dry bulkers which closed near lows

HIG, CI- down tremendously after last week’s gains…will likely bounce if market bounces

STP- among the weakest of the solars as it is now down almost 40$ in three days; looking for bounce here too or a break thru 12 if market opens higher yet solars weaken

WFC- share offering will be at 27

GOK- very weak

DPTR- among the hardest hit of the smaller oil stocks

RGC- among the entertainment stocks breaking to new trend lows

MOS, POT – fertilizer stocks have done nothing but decline since the election

GT- the once venerable tire maker broke to a new trend low yesterday
Earnings:

FRI NOV 7 BEF

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RRI S SRZ

SSP TTI WIN

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Good luck today.