Saturday, April 10, 2010
Itz Weekend Review/ On Your Marks...Set... Go! Earnings Season
Alcoa gets things going with Q1 earnings reporting cycle on Monday but all eyes will be on Intel, JP Morgan, Google and Bank America starting on Tuesday with Intel. On Wednesday JP Morgan Chase (JPM) an Itz Pix portfolio holding is expected to report 65-cents per share compared to 40-cents a year earlier...anything higher and the banks will be scrutinized even more, the naking sector is already under fire for higher taxes and fees on big banks. Citigroup reports on the 19th and Lincoln on April 28th.
On the other side of the globe Secretary Timothy F. Geithner’s unscheduled visit to Beijing last week fanned speculation that China may be ready to ditch a currency policy adopted to counter the global crisis. Will the yuan assume its appreciation? >> Read Story
So, this weeks starts earnings, Friday is options expiration and the following week should just about have all 500 companies reporting. To wrap things up the FOMC meets at the end of April (27th & 28th), should they change any language in their statement...expect profit taking to start. This market continues to remain overbought- having runup nearly 15% in 8 weeks. Elliot Wave President, Robert Prechter was recently on CNBC, he made some valid observations. >> Link to video Now...Itz is not going bearish here, just that the market is overbought and expect a pullback soon.
Another noteworthy video.... from CNBC- Doug Dachille, First Principles Capital Mgmt, CEO on Fannie & Freddie.
In this chart the Equity Only Put-Call Ratio ($CPCE) 50-ema is currently levels not seen since Jan 2004 & July 2005. However, the $SPXA50R & $SPXA200R , percentage of $SPX stocks trading over their 50 & 200 moving averages then were much lower then current levels >>2003/2004 Chart Link The 200-ema didn't hit 0.60 until the spring of 2006, albeit the indicator was still relativley new. Chart Link
However the $VIX was trending lower and the 10-year $TNX was just under 4% then and trending towards 5%. Of course back then we didn't have our government 'unprecedented' debt & spending and 10% unemployment either...however, just making an observation that caution is warranted after this recent rally.