David Moenning Daily State of the Markets: 1/26
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Call it a Draw
In looking at yesterday�s market, it is clear that the bulls made an effort to rally the troops on four separate occasions while the bears countered with three attempts to knock prices down. And after 1.9 billions shares exchanged hands on the NYSE, the end result was a whopping move of 2 Dow points, so I guess we�ll have to call it a draw.
Stocks moved up in the early going on the back of decent earnings and some M&A activity from BSX and Disney. And for the first half-hour anyway, it looked like the bulls would once again try and make the most of their rebound opportunity. But the day�s only economic news put a damper on the mood as the report on Existing Home Sales reminded traders of the ongoing pullback in the housing market.
While the modest slowdown in the housing market isn�t exactly a surprise, it does remind investors that the economy has lost a source of stimulus that has been a driving factor over the past three years. Then when you toss higher rates, a big jump in oil prices, and a little inflation into the mix, it�s hard to get too fired up about the upside potential for the market in general.
The end result was what William O�Neil, the founder of Investors Daily, used to call an IVWOPP. The acronym stands �increased volume, without price progress.� In short, this is a small sign of distribution and is something that traders will need to watch closely.
The other item that has traders� attention right now is the precarious support that all three major indices are clinging to at the moment. The levels have been �tested� during each of the last four sessions and so far at least, have held up nicely. It is also positive that stocks are once again oversold on a short-term basis. So, the bulls will argue that the stage is set for a rebound higher and will be looking for a catalyst. The bears however, will argue that the support is weak and if broken, will open the floodgates to lower prices.
Turning to this morning, in the early going it would appear the bulls are looking to take their shot here. Surprisingly strong earnings from Caterpillar, which spoke of unprecedented customer demand, Eli Lilly, and LSI Logic has the futures up strong before the bell.
On the economic front, the Durable Goods report came in pretty much in-line with expectations, but has to be considered a decent report. Orders for durable goods in December rose by +1.3%, which was a bit better than expectations for a gain of 1.0%. When you take out autos, orders were in-line with expectations at +0.9%. And then the so-called �key� number, the Non-defense Capital Goods Excluding Aircraft (isn�t there an easier way to say this?), was up by +3.5%, which marks the third consecutive advance.
Stocks have shown little reaction to the report, although bond yields are moving up on the news. The yield on the 10-year has moved up to the highest level of the year and is currently yielding 4.52%, which is something that may get traders� attention at some point today.
Stocks "In Play" This Morning:
AMGN � Reported $0.75 vs. $0.75
LLY � Reported $0.80 vs. $0.76, revenues $3.88B vs. $3.87B
NOK � Reported EU0.25 vs. EU0.25, proposed div of EU0.37, buyback of EU6.5B
CAT � Reported $1.20. vs. $1.10, revenues $9.66 vs. $9.18
BR � Reported $2.48 vs. $2.34, revenues $2.37B vs. $2.20B
LSI � Reported $0.13 vs. $0.11, revenues $506M vs. $488M, raised guidance
NVLS � Reported $0.20 vs. $0.16, revenues $332.3M vs. $314.3M
QCOM � Reported $0.39 vs. $0.38, revenues $1.74B vs. $1.76B
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMGN
To see David Moenning�s Trading Record or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
In looking at yesterday�s market, it is clear that the bulls made an effort to rally the troops on four separate occasions while the bears countered with three attempts to knock prices down. And after 1.9 billions shares exchanged hands on the NYSE, the end result was a whopping move of 2 Dow points, so I guess we�ll have to call it a draw.
Stocks moved up in the early going on the back of decent earnings and some M&A activity from BSX and Disney. And for the first half-hour anyway, it looked like the bulls would once again try and make the most of their rebound opportunity. But the day�s only economic news put a damper on the mood as the report on Existing Home Sales reminded traders of the ongoing pullback in the housing market.
While the modest slowdown in the housing market isn�t exactly a surprise, it does remind investors that the economy has lost a source of stimulus that has been a driving factor over the past three years. Then when you toss higher rates, a big jump in oil prices, and a little inflation into the mix, it�s hard to get too fired up about the upside potential for the market in general.
The end result was what William O�Neil, the founder of Investors Daily, used to call an IVWOPP. The acronym stands �increased volume, without price progress.� In short, this is a small sign of distribution and is something that traders will need to watch closely.
The other item that has traders� attention right now is the precarious support that all three major indices are clinging to at the moment. The levels have been �tested� during each of the last four sessions and so far at least, have held up nicely. It is also positive that stocks are once again oversold on a short-term basis. So, the bulls will argue that the stage is set for a rebound higher and will be looking for a catalyst. The bears however, will argue that the support is weak and if broken, will open the floodgates to lower prices.
Turning to this morning, in the early going it would appear the bulls are looking to take their shot here. Surprisingly strong earnings from Caterpillar, which spoke of unprecedented customer demand, Eli Lilly, and LSI Logic has the futures up strong before the bell.
On the economic front, the Durable Goods report came in pretty much in-line with expectations, but has to be considered a decent report. Orders for durable goods in December rose by +1.3%, which was a bit better than expectations for a gain of 1.0%. When you take out autos, orders were in-line with expectations at +0.9%. And then the so-called �key� number, the Non-defense Capital Goods Excluding Aircraft (isn�t there an easier way to say this?), was up by +3.5%, which marks the third consecutive advance.
Stocks have shown little reaction to the report, although bond yields are moving up on the news. The yield on the 10-year has moved up to the highest level of the year and is currently yielding 4.52%, which is something that may get traders� attention at some point today.
Stocks "In Play" This Morning:
AMGN � Reported $0.75 vs. $0.75
LLY � Reported $0.80 vs. $0.76, revenues $3.88B vs. $3.87B
NOK � Reported EU0.25 vs. EU0.25, proposed div of EU0.37, buyback of EU6.5B
CAT � Reported $1.20. vs. $1.10, revenues $9.66 vs. $9.18
BR � Reported $2.48 vs. $2.34, revenues $2.37B vs. $2.20B
LSI � Reported $0.13 vs. $0.11, revenues $506M vs. $488M, raised guidance
NVLS � Reported $0.20 vs. $0.16, revenues $332.3M vs. $314.3M
QCOM � Reported $0.39 vs. $0.38, revenues $1.74B vs. $1.76B
Disclosure: At the time of publication Mr. Moenning and/or related companies are long the following positions: AMGN
To see David Moenning�s Trading Record or the rank for any Top Guns Stocks, visit: http://www.AnotherWinningTrade.com/SI
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