Friday was one of the first days in a long time that we did not look at the market at the opening, at the closing, or anytime in between. We actually enjoyed a day of golf with one of our neighbors, a lovely date night dinner at Hanna’s with Devin (In case you were wondering). The have this really good Wagyu Beef Meatball Pasta that was to die for.
We enjoyed it with a great glass of 2007 Cuvée du Vatican Châteauneuf-du-Pape Réserve Sixtine. It did not have an overpowering nose on it, but you could pick up some exotic florals and a touch of smoke. It had some jammy fruits working on the mouth and did a great job of grabbing the glass. As we continued to enjoy it I got some cherries and a fig fragrance. Really special.
Saturday morning early, we were awoken with a nasty rain and wind storm and as you can imagine, we are a little gun shy so we checked the neighborhood to find we would live to worry another day. The day, while looking stormy had a nice Celtic feel to it. I spent about 5 hours cleaning 184 bottles of wine. (No I did not open a single bottle.) We have to get the bottles clean and out as they rebuild our wine room next week. We finished the evening with yet another night at Hanna’s. This time I enjoyed a small filet and delicious grilled asparagus. We enjoyed the CdP from the night before that we brought another bottle of Vatican with us.
This morning I enjoyed breakfast with “the guys” as they waited for the fairway’s to defrost. It was a cool 34 degrees this morning, but a beautiful clear sunny day.
We bore you with all of this just to prove, I really do have a life. Yes I did read through this weeks Baron’s and we began a home study program on charting by IBD. It is a great course and have picked up a few charting nuances I find incredibly interesting. We will share more as we can actually profit from the techniques described.
Cronastics For The Week
None you clamored for the proprietary chart of market trending developed by yours truly. That is a good sign that like me, I am not sure what value the chart might have. But just for fun let’s take a look at what the chart might be telling us. This is a 10 day trend analysis. As a forward looking tool, we are seeing little or no value, however like almost all things in life, the market will typically seek a homeostasis or equilibrium of sorts. The run we had for the 7 trading sessions before the 18th of February was very strong and very hot and approaching two year highs. Egypt made everyone stop a second and possibly ask, too hot? The chart appears to say yes, but again little in the way of forward looking tells.
The Week Ahead
The strong finish on the week took our guess of the S & P 500 finishing at 1,312 off the table. We did predict the index to be down 1.9% on the week, but with the premature positive finish (Our guess is the market will open lower tomorrow, at least a point lower.) the index was only down 1.7%.and it finished at 1,319. Still a close guess. It was interesting to see the market ignore the 4 basis point move downward in the GDP figure released on Friday. The positive response might be interpreted as the Fed have good cause to finish the quantitative easing.
Tomorrow we have personal income, consumer spending, and the personal consumer expense price index. With wages and employment only slightly improving we would not expect much of a jump on personal income so let’s call that flat. We think we will see an unexpected jump in spending and core price measurements due to oil and the last number given for auto sales which were up. The pending home sales index will disappoint tomorrow as well. This news will do nothing to make the market feel better about what will probably be higher oil prices and more chaos in the Middle East. Look for the 1-1.5% gain on Friday to be erased and oil, gold and silver to go up. Watch the VIX as this number should creep up.
Tuesday we will see another strong and positive ISM Manufacturing index. Unfortunately more chaos in the middle east will keep the market in check. Look for a low volume flat day. Gold will probably break through the 1,425 resistance point with its eyes on a 1475-1500 price range next.
Construction spending figures will be released but everyone will be talking about the middle east and the spreading contagion. Also in some dark corner of the congress and senate deals will be secretly happening to extend the deficit limit so we don’t shut down the government. The Parliament of Whores will be wheeling and dealing this week but you won’t here much about it until its announced. Big monies will be trying to watch and what they discover will drive currency exchanges and commodities. If you see gold and silver start to escalate they are probably seeing an impasse. If you see a slight downward correction assume they know a deal has good chance of making to the white house. Remember almost 74% of republicans do not want a deficit extension and 61% of democrats do not want a deficit extension. That is a good indication there will be deficit extension. Look for another half a point down in the market in very light trading.
Wednesday is relatively quiet day. You have the release of the Fed’s Beige Book and the ADP employment report YAWN! Look for a slightly up day as all the scariness in the middle east will be digested and worked into the market. The commodities will be flat and trading will be light as everyone will be waiting to see if we the Government stops and takes a furlough.
Thursday initial jobless claims will be disappointing because of public job losses. Private hiring will give hope. Another flat day on light trading.
Friday’s Employment numbers will probably disappoint. They are expecting 180-190 new jobs, and we are thinking a disappointing 150,000. This, with more crisis in Oman and the international condemnation of Libya forcing them to befriend the uranium hunting Iran will make things jittery in the market. The S&P will be down 2.1% next week closing at 1,291.
Defensive plays will be important last week like GLD, SLV, VXX, DBA, JJG or most commodity based ETFs and ETNs. The IBD is describing the market as an uptrend under pressure. We think by Friday we will see a couple more distribution days and a downward market warning.
PICK OF THE DAY
Based upon the above comments, we can not suggest buying anything except defensive or contrarian plays. So we will provide you with a pick worth putting on a watch list.
QPSA Quepasa Corporation, through its Web site, Quepasa.com, operates as an online social community for young Hispanics. Quepasa.com provides users with access to an expansive, multilingual menu of resources that promote social interaction, information sharing, and other topics of importance to Hispanic users. Its members focus on generating interactive community pages or communities to create customized pages to share news, pictures, upload videos, create blogs, and receive update emails from other Quepasa members. Quepasa Corporation sells its marketing services and solutions to advertising agencies and marketers in the United States, Mexico, and Latin America. The company was founded in 1997 and is headquartered in West Palm Beach, Florida.
You can think of this as the iTunes, Amazon.com, Facebook without all the cahs and the profit of those companies, for young latinos. While the cash situation here is weak and they have some debt, a little news piece this week caught our attention. Michael Nicklas was appointed the board and he has an amazing history of advising and making game players in this field. Earnings are weak but annual sales are hot.
The chart shows a nice cup and handle over the last two months of 2010. It has passed downward through its 50 day average (Not a good thing), but look for an 8 dollar entry point on two or three up days. Keep this on the watch list and check it every week or so. We feel this could be a sleeper.
Don’t Sweat The Small Stuff
|OK A 14.2 Trillion Dollar Debt Is Not The Little Stuff|