We had a nice bounce in the markets yesterday primarily on the heels of a nice bounce in Oil. I know you are probably tired of hearing me say that the me market and oil are attached at the hip. However, that is the reality of the current situation in the markets. At some point they will decouple and when that happens is anyone's guess. For now, we just need to play the markets with that theme in mind until it no longer works.
NDL announced a cut of their dividend look for more similar announcements from other oil related names.
AAPL reported earnings last night after the close and while the quarters earnings were decent the guidance was troubling for the street with concerns over emerging market growth (specifically china) and the negative impact of foreign currency exchange. If you are a long term holder of AAPL I don't think its time to abandon the stock.
As I reflect back over the last year I think about all the analysts that had been touting APPL and suggesting that it was a stock you must have in your portfolio. That recommendation was consistent when it was at 133 and has continued all the way down to the current price of 99. What's ironic is that there is only one sell rating on the stock even today. AAPL numbers were pretty impressive for the current economic conditions and their balance sheet is rock solid.
However, if the winds of change turn the analyst community against AAPL. I will be looking to make it part of my long term portfolio when everyone on the street hates it. A few weeks back we identified some potential areas of support where AAPL could fall that probably seemed ridiculous. Keep in mind that price and markets overshoot in both directions not just to the upside. When sentiment becomes consensus, that is typically when you see an overreacting irrational move and that is our opportunity to pounce.
For the markets themselves you can expect more volatility as we get both oil inventories and a statement from the Fed today. This could be a wild day. Expect a build in oil inventories which could bring oil back below 30. We are already seeing weakness in oil premarket and if for some reason, we are able to stabilize or move up after a bearish inventory build it could catch a lot of shorts off guard.
With the Fed statement the first move is typically a head fake. Wait 15 minutes before you make any significant moves. Let the statement be absorbed and analyzed before you commit to anything in a significant way. That doesn't mean you can't scalp the initial reaction just don't over commit.
The action in Gold was interesting yesterday and I know there are several out in the financial community that are bullish on Gold. It could run up into the statement, if you are in it, be careful and keep your eye on the dollar. If the Fed keeps up with its hawkish tone, indicating that it intends to raise rates four time this year and that they are in favor of a strong dollar policy gold will likely take a hit. If the Fed has a dovish tone gold could continue with strength but it is coming up to some long term technical resistance.
After we get through today, we will be able to focus on earnings from more big names like FB, MSFT, PYPL , QCOM, LVS, and VRTX .
My focus ETF ETN
Volatility Oil Biotech
UVXY XIV TVIX UWTI DWTI GUSH DRIP IBB LABU LABD
Gold Dollar
GLD NUGT DUST GDX GDXJ UUP
My focus PR Stocks
SUNE, TPH, AQXP
Thin floaters high risk
FATE, CAPN, INO
Oil names
KMI, GLNG, NBL, KOS
Earnings winners
MRCY, CVLT
This weeks watch list
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