Daily Wrap
Today was an ugly day for the markets. We had highlighted, for the Bulls, a potential inverse H&S setting up on the 60 minute SPY chart but noted that the lows from 11/13/12 HAD to hold or the market could be looking at a bad situation. The SPY made the highs for the day in the first 5 minutes of trading and then faced selling for the remainder. The first leg down completed around 11am EST and then we meandered until later until around 2:15 pm EST when we broke hard for the rest of the day. The President spoke and while the markets may not have liked what he had to say, the technicals were not calling for a rally and felt week all day long.
Stocks in the News today included Abercrombie & Fitch (ANF) which provided an earnings report Wall Street praised and did so by sending them up $10.74 or 34.45%. Considering ANF’s 52 week high is $57.56 and going back to 2011 the highs are near $80, sitting at today’s close of $41.92 after a 34% up day seems more like expectations and the stock had been so beaten this is just a reversion back to some mean. We will have to watch ANF’s trading going forward to see if this has marked a larger bottom.
Also in the news today was Facebook (FB) closing up over 12% today on what seems more like a sell the rumor buy the news type event. Thinking that there would be a reaction the first day shares became available after everyone has had months to get situated for the occurrence is a little mad. Ultimately I still believe FB could again become a teenager but will have to watch to see if with this major lock-up being in the rear-view if FB can move forward.
On such a bad day for the markets I will focus on another highlight Cisco Systems (CSCO) which finally beat earnings yesterday after the close and finished today nearly 5% higher. It was nice to see CSCO and John Chambers have a day in the sun after being so beaten. If they can remain there is another thing entirely.
According to Briefing.com, the following companies are scheduled to report earnings before tomorrow’s open: AMAP, BONT, BRC, BKE, CSIQ, CATO, PLCE, DANG, DEST, DLTR, EJ, GME, GSOL, HP, MMS, NAFC, PACT, PERY, ROST, SBH, SCR, SSI, TGT, TDG, WMT
Economic data for tomorrow includes: Initial Claims, Continuing Claims, CPI and core CPI and Empire Manufacturing.
Back to the S&P. We could have set an oversold enough level today to provide a bounce off the entended trend line and with the McClellan at first stage oversold levels but I would not be planning for a “V” bottom and any rally will likely be for quick traders only with a better set-up later for swing traders and investors.
That’s a wrap for tonight.
