Daily Wrap

DJIA -62.05 (-0.43%) to 14,452.06; S&P 500 -8.60 (-0.55%) to 1,552.10; NASDAQ -11.48 (-0.35%) to 3,237.59

I do not believe I have had a conversation about Cyrus in many years and if I remember correctly the last and only other time I did was with someone who had a vacation condo/villa there.  Otherwise I will now add today as the next time Cyprus was a topic of discussion as fears regarding their financial situation took the headlines.  Is the concern about Cyprus itself, no I do not believe so.  The fear is first the reminder of some EU country’s conditions and this just puts back into everyone’s focus our friends across the pond but also the response from Cyprus which included a proposal which would levy a one-time fee (tax) on depositors. This “tax” is and was the focus of discussions and debate and therein lies the problem.

After being down roughly 20 points in the S&P 500 futures in very early/overnight trading the market finally firmed up and essentially spent the remainder of the day rallying and almost reaching even until a 2:30 pm EST sell of finally closed down $8.60.  The Nasdaq was the strongest market closing only slightly lower which was thanks to Apple Computers (AAPL) which closed up 2.8% today on no news worth noting and just more on technical trading it seems.  AAPL seems destined to reach the 50 day SMA which is currently coming in around $464 leaving about 9 more points of upside likely in the short term.

A report from the Wall Street Journal sent Charter Communications (CHTR) nearly 9% higher and to new 52 week highs as they announced Liberty Media (LMCA) is close to a deal to buy 25% of the cable TV operator for about $2.5B.  At this point CHTR spiked to where the full value would then roughly be and likely reached at minimal a short term top.  Unless we see the valuations are even higher but I doubt that in this case.

I am watching for a potential longer term bottom in JC Penny (JCP) and today the named pressed over 6% higher on rumors that the company could look at becoming a REIT and some positive comments regarding their Joe Fresh shops.  Isn’t that REIT idea what Ackman wanted Target (TGT) to do a few years back?

A member of the Dow 30 was in the news and negatively so as Boeing (BA) lost nearly 1.5% after news that rival Airbus received an order from a previous BA customer, Lion Air, for $24B.  While 1.5% is not a dramatic move, it was enough to make BA the laggard of the Dow today and down roughly 4 times what the index.

The following noteworthy companies are scheduled to report earnings before tomorrow’s open: DSW, FDS, RTK, SVNT, SBLK

I would not be surprised to see the index look to tag the 20 day SMA and that is actually right where the futures stopped in early morning trading.  With support and both the 20 & 50 day SMA’s coming up I think the market will likely continue to hold or press higher but the first shot fired at this recent rally and ultimately the Bull held.  If I was a Bear I wouldn’t be all that discouraged.  Ultimately today’s new should have been digested but the initial sell reaction shows trepidation with the markets at these levels.  Priced to perfection?  Maybe not perfection but also a willingness to bail instead of stand and fight if the road gets rocky.