The Wrap 11/16/10

{+++}Commodities were clipped for deep losses today. That left the CRB Commodity Index to lose 3.2%. That makes for its fourth loss in five sessions and its second loss of more than 3% in that time. That streak of weakness has the CRB down 7.6% from the two-year high that it set last week.

All ten sectors were in negative territory, led by materials (-2.2%), energy (-2.1%) and tech (-1.9%).

Tomorrow morning before the open, three economic reports are scheduled to be released: 1) MBA Mortgage Applications (Consensus NA), 2) CPI (Consensus 0.3%) and Core CPI (Consensus +0.1%) and 3) Housing Starts (Consensus 600K) and Building Permits (Consensus 570K).

Tomorrow before the open look for the following companies to report: AMAP, BJ, CHS, DGW, PERY, STP, TGT, VIT, and WMG

It was a tough day for the bulls as the dollar marched higher yet again. The strong dollar is a killer for stocks and although a prolonged weak dollar isn’t good for stocks either, this dollar rally has left bodies in its wake. The greenback closed firmly above the 50 day moving average which is an important milestone for some technicians.

We had a nice long work today with IDT and two shorts triggered, FSYS and LL.

I have started my shopping list for longs and it includes names BTU, UYM and AAPL for starters but its too early to catch a falling knife and we may need to test some lower levels before they take this thing higher again.

My gut says this will pass very soon, and the bulls, right or wrong, justified or not, will start bidding up stocks again (especially tech, oil and materials). If Ireland gets resolved it will probably stop some of the rumors of the fall of Europe as a whole. It is time for caution and some cash here though, because Portugal, Spain France and Italy have the same issues, so don’t be a  hero.

Let’s not forget China may be raising rates, which additionally takes the bloom off the rose.

It will be interesting to see if this market buys the dip soon and if it does,will they sell the rip right away, if they do the latter, it tells me that they just want out of stocks.

It’s probably a good idea to look at some select tech stocks that have been hammered as tech doesn’t care as much about what is happening in Europe.

Charts always matter, but not so much when you have a fear or risk aversion sell off like we are seeing now. Fear and greed are on steroids, so following the momentum is more important here. However certain technicals are important and that is the 50 and 200  day moving averages on your daily charts.

The Greenback
The Greenback

If you are as disgusted as I am with this ‘hot’ GM IPO on Thursday, then I suggest you turn CNBC off the next couple of days as Phil LeBeau is back oping the merits of the most boring story ever told.

For now let’s watch our short list closely and I will email you an alert tomorrow if I see anything of interest. It’s been a tough couple of days of get some rest.

Here is a short to put on the watchlist.

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The Wrap 11/18/10

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