March 28, 2024

Daily Wrap

DJIA +83.86 (+0.58%) to 14,539.14; S&P 500 +8.71 (+0.56%) to 1,563.23; NASDAQ +13.81 (+0.43%) to 3,258.93

Nothing much happened today, another day another Dow high, you know, the usual.  Today at the close actually would not have been a bad spot to try and take a small short as a spec trade into tomorrow.  Nothing big, nothing saying a top is in but just 10 straight days up in the Dow is somewhat extended.

Economic data today included U.S. jobless claims which came in lower than expected at 332K.

Stock of the day today was E-Trade Financial (ETFC) which lost over 8% after Citadel, ETFC’s largest shareholder, announced it was selling its entire stake in the company.  I saw news that there was a spot secondary which was priced at $11.35 by citigroup so the shares should be out of the way now.  ETFC will potentially have issues going forward but recent news has been positive especially with their delinquencies of their loan portfolio.  ETFC has also seen a few downgrades recently including from Keefe Bruyette today to Underperform with a $10 price target.

Losing ground today and to the tune of over 27% was VirnetX (VHC) on a Bloomberg report that the company lost a patent trial against Cisco (CSCO).

Want to know how to miss on earnings and revenues and still close up nearly 20% for the day?  Take a page from Men’s Wearhouse (MW) and hire someone to look at one of Wall Street’s favorite phrases “strategic alternatives”.  MW hired Jefferies to just that for their K&G stores.

Unfortunately for Vera Bradley (VRA), they didn’t announce any “strategic alternatives” along with their disappointing earnings report and instead closed over 9% lower.  VRA was downgraded at William Blair, Sterne Agee reiterated their underperform rating and expressed concern on the company’s guidance for 2014 as being too optimistic and Jefferies stated they think weakness is a buying opportunity and maintained a Buy rating with a $35 price target.  I would like to see VRA make new lows which might provide a spot for an investment but I am not sure that is realistic.  I will keep an eye on VRA to look for opportunities going forward.

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: AXAS, BWS, DXLG, HIBB, PGNX, SNMX, ZGNX

From the Watch List I raised the stops on CHK and also raised the target for CLD up to $20 from $18 reflecting the fact that we reached the initial target but also were always looking for then $20 and possibly $22.

The trend remains your friend but keep decreasing risk/exposure bla blah, you heard me say this many times now.  What I want to focus on is that we are now very close to the levels I had been highlighting the potential 4 hour inverse Head & Should pattern in the S&P 500 emini was calling for and more notably (because I am not on CNBC…yet) is that we are approaching Tome DeMark’s target level of $1,567.40 in the S&P 500 cash index.  This action is not surprising also considering this is options expiration but if we close strong into tomorrow, I might take a short term trade (maybe using next weeks options) on the short side as we could look for drop next week for consolidation.  I will decide based on tomorrow’s action.

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