TUES. NOV. 18- The Bad Word

On Saturday, George W. Bush said arguably one of the most amazing statements ever uttered by a standing president in modern history. When asked why he supported a bailout of the U.S. financial markets much less entities, Bush said he was “a free-market person, until you’re told that if you don’t take decisive measures then it’s conceivable that our country could go into a depression greater than the Depression.” No matter why one thinks Bush would say such a thing, it is absolutely stunning to hear the leader of the free world note that he is not a free-market capitalist through and through. Furthermore, he did not use the “r” word a.k.a. ‘recession’ to describe the perilous state of the economy; he used the much scarier “depression.” While the volume of the markets have dried up in recent weeks as there is an increasing dearth of big-time participants, it is statements such as the aforementioned quotation by the president which absolutely does not inspire any confidence whatsoever to the Wall Street community much less the factory workers at the car facilities in Detroit. For day traders, it is but one more example of how any statement at any time – particularly by a leader can deflate things when and if made during market hours. That particular press conference was held on a Saturday, but words of the world’s leaders can move markets extraordinarily rapidly these days. Thus, day traders must be attuned to comments noted by people such as Henry Paulson made on Friday because the Dow literally moves in 100 plus point increments on any words by any major world figure at this point.

Feels like “Groundhog Day” for this segment of the blog- stocks throughout the world fell about 2% across the board overnight albeit on low volume. Commodities and the currencies are generally stable. Stocks are weak new state-side; however, the ‘feel’ is a little different this morning because of HPQ. Look for a little more pile-on selling shortly after the open, but if the pressure evaporates, there will likely be a violent short covering rally. This rally needs to take place fairly early (maybe even pre-open) else it will likely get dicey later as another rest of the trend lows is made.


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-

HPQ- raised guidance

CLF- merger agreement off with ANR; they are acquirer

TARG- up yesterday on positive drug news

YHOO- CEO Yang resigned; company may be perceived as more willing to do a deal now

TMTA- received a cash buyout bid around 20 yet stock did not react after-hours yesterday; will likely do nothing but should trend toward 20

GTE- closed near a high

CHIP- signed a major contract yesterday; could be A-B-A2 thru 1

HD- beat earnings, but said sales growth would be slightly worse than expected

Bad-

ANR- merger agreement off with CLF; ANR was target

WFR- warned on its outlook

DIVX- bad earnings

MET, PRU, HIG- major insurers closed near their lows yesterday

ANF- this clothing retailer continued its descent

GS, MS, MER- brokers continue to portend trouble for broader market

MIC- closed weak again

STSA- small bank closed at new trend low

CENX- producer of aluminum closed on a low; will likely move with metals today

CTRP- bad earnings

MHK- the carpet producer closed at a low

ADS- down in sympathy with COF yesterday; should bounce today if market bounces

DIVX- warned

SOL-terrible earnings

Earnings:

TUES NOV 18 BEFORE

ARM HD MDT

SKS SOL

TUES NOV 18 AFTER

JBX PSUN PVH





Good luck today.