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The Wall Street Greek blog is the sexy & syndicated financial securities markets publication of former Senior Equity Analyst Markos N. Kaminis. Our stock market blog reaches reputable publishers & private networks and is an unbiased, independent Wall Street research resource on the economy, stocks, gold & currency, energy & oil, real estate and more. Wall Street & Greece should be as honest, dependable and passionate as The Greek.


Seeking Alpha

Thursday, March 12, 2015

TODAY’S MARKET – Morons Make Markets Like These

moron
Morons are apparently making this market. Today I read that the Federal Reserve meeting is now dictating trade. Since Friday’s jobs report I’ve been notifying my readers that the Fed meeting has been dictating trade. Apparently the morons don’t read me. That’s lucky for me, and even luckier that they don’t figure things out too quickly, giving my lazy fingers a few extra days to jot down aging ideas. We’re heading to a market correction folks. Wednesday’s pause was simply a test of the 50-day moving average that will not hold. I’m not sure the 200-day moving average will either by next Wednesday’s close, or next week’s end considering we’re dealing with some slow folks here. Today’s economic and corporate factors are highlighted below, so keep reading. Please do follow our stock market blog on Twitter.

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Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Security
03-11-15
YTD
TTM
SPDR S&P 500 (NYSE: SPY)
-0.2%
-0.3%
+11.6%
SPDR Dow Jones (NYSE: DIA)
-0.2%
-0.3%
+10.5%
PowerShares QQQ (Nasdaq: QQQ)
-0.6%
+2.1%
-17.8%
SPDR Gold Shares (NYSE: GLD)
-0.7%
-2.9%
-14.7%
iPath S&P Crude Oil (NYSE: OIL)
-0.8%
-12.4%
-54.4%
PIMCO Total Return (NYSE: BOND)
+0.2%
+1.8%
+7.2%
PowerShares DB US $ Bullish (NYSE: UUP)
+1.1%
+8.9%
+23.3%
iPath S&P VIX ST Futures (NYSE: VXX)
+2.5%
-34.1%
-5.7%

Stocks closed lower on Wednesday despite trading in the green off and on during the day. In my work published on Wednesday, I indicated that the day’s show of strength was a temporary bounce off the 50-day moving average. I continue to expect stocks to test even lower bars for support and not find it as we head for our first market correction in 41 months. This market run is 240% or so deep and well overdue for a 10% retest. The right catalyst is here to cause it.

Today’s Stock Market


Investors are keenly focused on the Federal Open Market Committee (FOMC) meeting due next week and its poor excuse for a policy statement. It will likely say less about Fed patience, and that will allow the dollar to mark parity with the euro before burying it. Needless to say, it will sink stocks as well, as will the build up to the event.

I’ve written extensively on the subject at this point, but for those just tuning in… Rate hikes are bad because they raise the cost of capital for corporate America, thereby raising the bar for economic value creation, which in turn makes market value creation harder to achieve. Even though the Fed has indicated it is mindful of the strong dollar and it will not raise rates immediately, panicked investors who never saw the freight train coming will fear a June rate hike that never comes. It’ll come in September most likely. And when it comes, it’s not expected to be followed by a steep course of action by the Fed, but rather a long drawn out path. Still, even as the cost of capital will remain relatively low for corporate America, most of the morons on the market won’t realize that right away. We need to see a selloff first… FYI, my biggest problem is that I give the market too much credit and sometimes am too early with my forecasts due to my misjudgment of morons as mavens.

In that regard, there is still some concern about Greece leaving the euro-zone because morons are not limited to this side of the Atlantic Ocean. The bigger problem is that morons have enough trouble figuring out their own market, let alone understand the dynamics of another, so media pundits keep counter-productively misleading U.S. investors about Greece. I don’t mind though, as I’ll be buying real estate cheap soon because of it all.

Economic Reports


Just one figure matters Thursday really, or is capable of moving the market anyway; it’s the retail sales data. Pay attention to the figure ex-autos and gasoline for obvious reasons. Let me spell it out for the morons: Gas prices have been extremely volatile lately and will cause confusion about the real state of consumer spending if we don’t look past its impact. Retail Sales excluding autos and gasoline is expected to have grown by 0.5% in February, up from the 0.2% growth seen in January. As long as the result is in line it will support stocks, but it’s probably of no matter considering the much greater weight being given to the upcoming Fed meeting.

THURSDAY’S ECONOMIC REPORT SCHEDULE
Economic Data Point
Prior
Expected
THURSDAY


320K
309K
-0.8%
0.3%
-Ex Autos & Gasoline
0.2%
0.5%
43.5

-228 bcf

-2.0%
-0.1%
-Import Prices
-2.8%
0.2%


-Inventories
0.1%
0.1%

Corporate Factors


The Fed released the results of the second round of stress tests, which are relatively insignificant folks except for that they keep some banks from returning enough return to shareholders for the sake of the possibility of a catastrophe. Alas, we have seen that catastrophes are all too common, I suppose because of the morons devising exotic leveraged investment instruments… Anyway, it appears Citigroup (NYSE: C) will get the biggest lift from the data release based on what I’ve heard and the fact that it’s up more than 3% in the after-hours. Bank of America (NYSE: BAC) is down, but the stock is so deeply discounted it should not drop too far. Buy it on weakness friends, considering the Federal Reserve is about to remove critical language that will drive interest rates higher ahead of Fed rate action.

In my report published Wednesday I said sell Shake Shak (Nasdaq: SHAK) ahead of its report because it was overvalued and its inexperienced corporate management team would disappoint a critical marketplace. It happened, and those of you shorted its stock or are using derivatives to bet against it are rejoicing I suppose. SHAK is down 6% in after-hour trading. Thursday you’ll want to buy Ulta Salon (Nasdaq: ULTA) ahead of its report. Thank me later. The options are too expensive though, and considering a market correction is coming, you had better be willing to be a long-term stakeholder in anything you buy now.

HIGHLIGHTED EPS REPORTS
Company
Ticker
THURSDAY

Aeropostale
NYSE: ARO
Allied Motion Technology
Nasdaq: AMOT
Anacor Pharmaceuticals
Nasdaq: ANAC
Antares Pharma
Nasdaq: ATRS
Athersys
Nasdaq: ATHX
BioAmber
Nasdaq: BIOA
BioDelivery Sciences
Nasdaq: BDSI
Bon-Ton
Nasdaq: BONT
CAMAC Energy
NYSE: CAK
Cantel Medical
NYSE: CMN
Central European Media Ent
Nasdaq: CETV
Children’s Place
Nasdaq: PLCE
Chinacache Int’l
Nasdaq: CCIH
ChipMOS Technologies
Nasdaq: IMOS
Clubcorp
Nasdaq: MYCC
Constellium
Nasdaq: CSTM
CTI BioPharma
Nasdaq: CTIC
CTPartners Executive Search
NYSE: CTP
Cytori Therapeutics
Nasdaq: CYTX
Derma Sciences
Nasdaq: DSCI
Dex Media
NYSE: DXM
Dollar General
NYSE: DG
E Commerce China Dangdang
Nasdaq: DANG
El Pollo Loco
Nasdaq: LOCO
eMagin
Nasdaq: EMAN
Epizyme
Nasdaq: EPZM
FutureFuel
NYSE: FF
Gas Natural
Nasdaq: EGAS
Gastar Exploration
NYSE: GST
Genesco
NYSE: GCO
Global Partners
NYSE: GLP
GSV Capital
Nasdaq: GSVC
Hawaiian Telcom
Nasdaq: HCOM
Hill Int’l
NYSE: HIL
Houston Wire & Cable
Nasdaq: HWCC
Hovnanian
NYSE: HOV
Ignite Restaurant
NYSE: IRG
InspireMD
Nasdaq: NSPR
Investors Real Estate Trust
Nasdaq: IRET
JA Solar
Nasdaq: JASO
Jamba
Nasdaq: JMBA
JG Wentworth
NYSE: JGW
Journal Communications
NYSE: JRN
Kirkland’s
Nasdaq: KIRK
KMG Chemicals
NYSE: KMG
Kratos Defense
Nasdaq: KTOS
LGI Homes
Nasdaq: LGIH
Lifetime Brands
Nasdaq: LCUT
Luna Innovations
Nasdaq: LUNA
Magnetek
NYSE: MAG
Medifast
NYSE: MED
Metaldyne Performance
NYSE: MPG
Natural Gas Services
NYSE: NGS
OHA Inestment
Nasdaq: OHAI
OncoMed
Nasdaq: OMED
ORBCOMM
Nasdaq: ORBC
Peregrine Pharmaceuticals
Nasdaq: PPHM
Ply Gem
Nasdaq: PGEM
Protalix Biotherapeutics
NYSE: PLX
Qiwi
Nasdaq: QIWI
Re/Max
Nasdaq: RMAX
Revlon
NYSE: REV
Rice Energy
Nasdaq: RICE
Rice Midstream
NYSE: RMP
Shanda Games
Nasdaq: GAME
Springleaf
Nasdaq: LEAF
Stein Mart
Nasdaq: SMRT
Straight Path Communications
Nasdaq: STRP
Sunesis Pharmaceuticals
Nasdaq: SNSS
Synta Pharmaceuticals
Nasdaq: SNTA
Tekmira
Nasdaq: TKMR
Towerstream
Nasdaq: TWER
Trovagene
Nasdaq: TROV
Ulta Salon
Nasdaq: ULTA
Vail Resorts
NYSE: MTN
Zumiez
Nasdaq: ZUMZ

DISCLOSURES: Kaminis is long BAC. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Eagles

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