Daily Wrap

DJIA –14.05 (-0.10%) to 13,881.93; S&P 500 -2.78 (-0.18%) to 1,500.18; NASDAQ +4.59 (+0.15%) to 3,154.30

I had to blink twice and rub my eyes but it was true that the S&P 500 closed lower.  The Dow followed suit but AAPL finally having an up day helped the Nasdaq manage to eek out a small gain.  Now before we get crazy, this was a near 3 point down day on the S&P after 8 straight days of moving higher.  I have been looking for some consolidating which really hasn’t come to fruition.  Any pullbacks still look to be greater opportunities for higher prices at this point.  I will be watching the 1 hour SPY MACD for a recycle which has been woefully lagging of late.

Today’s economic news saw Durable Goods orders rise 4.6% much higher than the 1.8% expected but Pending Home sales came in at a -4.3% which was well below expectations.  Neither really drove the market one way or the other but both were noteworthy.  As always you can visit the Event’s Calendar for the release of economic data, scheduled meetings and other news that could move the market.

In the news today was Caterpillar (CAT) which reported earnings before the market opened.  CAT closed up over 1.5% but I have to admit that what I read did not encourage me in the name.  CAT reported EPS of $1.04 vs analysts expectations of $1.70 but the $1.04 number included a $0.87 charge for the write down of a subsidiary.  I set the EPS aside due to the one time charge and then looked at the revenues, which came in slightly light at $16.08B vs consensus estimate of $16.12B.  What shocked me and sounds like it took a few other by surprise was the canyon like guidance they provided for 2013.  The company advised that they see 2013 EPS ina  $7-9 range on revenues of $60-68B.  The consensus was $8.54 on $65.18B.  This looks light to me and the company then took the time to note that the guidance is so vague because they see “uncertainty in the global economy”.  In late November ’12 I noted on stock twits that “$CAT, if no global slow down CAT higher, if so CAT to $70-need to see more but now on watch list http://stks.co/aEvO”.  We obviously then broke the downtrend line I noted on the chart and have been on a steady move higher to the current $97.45 closing price.  I am going to go back to that statement and say while I will be posting a chart on StockTwits (WSConsensus) highlighting a potential buy point as a trade, I am not very interested in CAT.  The markets largely seemed to shrug off what looked like a very uncertain and downbeat report and that may be due to the fact that the market believe much of this was already baked into Cat’s recent decline from the 2/24/12 intraday highs or some other reason but if the low end guidance ends up being the case and then we start to have some fear of 2014 I think CAT could see the 60-70’s.

I spent more time on CAT than expected so I will quickly cover some of the other news of the day I saw.  Two companies moved lower on the news that a third would be entering the stock market via an IPO.  3D Systems (DDD) and Sratasys (SSYS) were the ones moving down as ExOne filed.  ExOne sells industrial 3D printers.  Both names have been very HOT stocks  so I think it makes sense to track this ExOne for a potential trade once public.

Moving higher today, over 6%, was Hess Corp (HES) which announced it has hired Goldman Sachs to sell its oil storage terminal and also that they would be exiting the oil refining business.  This will leave the corporation as an exploration and production company.  Some speculated this move was to deflect activist shareholder interest, predominantly from Elliott Associates who had previously notified the company that they are considering nominating directors to the board.

The last name for today was a retailer moving lower.  Jos. A. Bank (JOSB) closed down 15.11% after pre-announcing that their 2012 net income will be down about 20% from the previous year.

According to Briefing.com, the following noteworthy companies are scheduled to report earnings before tomorrow’s open: BSX, GLW, DHR, LLY, EMC, F, HOG, HRS, ITW, IP, NEE, NUE, BTU, PNR, PFE, TROW, TYC, X, VLO

Back to the S&P 500, I am watching the 1 hour charts and specifically the MACD to see if we can get a pullback/consolidation with that MACD recycling which then provides the next trade-able opportunity.  Ultimately I think we could get back down to test the breakout from early this year but I think that comes in a little bit and any short term pullbacks will likely be small and short lived until we see slightly higher levels which then lay way to a better pullback.