More earnings out this morning. Today some of the big names are AGCO, AKS, BYD, BP, TXT, VLO and WYNN. BIDU also reported disappointing earnings after the bell yesterday and is trading down 17%.
BP is currently up about 4% in the pre-market to $58. I mentioned on Sunday that USO was bumping up against its 300 day SMA. There are still earnings from the other major oil companies due out this week but if the reports are good perhaps USO moves higher over its 300 day. In my book, that would be confirmation of a longer term move.
BIDU moved up over its all time high before earnings but the breakout has failed for now. The stock traded after hours yesterday at about $375 which is the 50 day SMA. This morning, it is trading down at about $360. It looks like the 50 day may fail. I personally don’t think this is a buying opportunity. I would rather make the stock prove itself and buy on a real breakout over its all time high. It’s too early to think about shorting. Let’s see how the stock handles the 50 day SMA and horizontal support at $340.
So BIDU is not all that interesting here, but popular China stocks such as SNDA and NTES look like they are ready to crack (SOHU has been in free fall too).
SNDA is a short idea. The prior breakout over $46 looks like it is going to fail. The stock is already below the 50 day and horizontal support at $46 is coupled with the 200 day SMA. If this breaks, this one should move down to the $39-40 area and potentially much lower.
Interestingly enough, FXI which does not include these names, doesn’t appear to be influenced by the collapse of these stocks.
The overnight range on the ES is very tight. At 7:35 ET, it is 1063-1069. There is no point to discussing an overnight range, because it won’t be resolved until Consumer Confidence and Case-Shiller come out before the open at 9:00 ET.
People get excited in both directions with each little move in the market. However, the trend of the dollar’s decline (and the market’s rise) is still in tact. UDN closed right at support yesterday. Will it cut right through support or is this a low risk entry point on UDN and the market generally? I don’t know the answer. I’m currently long but only about 20% invested. I won’t add unless Dow 10,000 is taken out with a real breakout (perhaps if we get a good GDP number). I assume the odds of going higher or dipping to a point where stops are triggered is about 50/50. It’s not a time to load up.
Those with a bearish tilt are all excited but this is just another gyration to cause overtrading before the GDP report on Thursday. If those economic numbers are perceived as good, this 2-day pullback will simply be “momentum burn” before a push higher. If the GDP number is disappointing, the first target will be the 50 day SMA at $105. If that is broken, the next major level is horizontal support at $98. There will be time to get long or short once this is all resolved.
-
chartsandcoffee
