Following yesterday's blue-chip inspired rally, futures indicate a lower open as European mkts tumbled after the UK's third-largest lender Northern Rock confirmed it had arranged emergency lending facilities from the Bank of England, with its mortgage portfolio used as collateral. The lender said its own portfolio of mortgages continued to function, but global investor demand in medium- and long-term mkts for senior unsecured and asset backed securities remained "greatly reduced". Shares in banks throughout Europe and the U.S. are lower on the news, and matters weren't helped when Societe Generale downgraded Deutsche Bank (DB) and Credit Suisse (CS) and Merrill Lynch downgraded American Express (AXP). Futures dropped even further after Retail Sales in Aug (+0.3% vs. consensus 0.5%) and Sales ex-autos (-0.4% vs. consensus +0.2%) came in lower than expected. It's also worth mentioning that the People's Bank of China raised its benchmark one-year lending rate for the fifth time this year, as expected, to a nine-year high of 7.29%. Despite these headlines, traders can look forward to another light trading day as Rosh Hashanah ends and today is not only Friday, but a Friday before a Fed meeting (9/18). Dow futures are currently -81; Nasdaq futures are currently -16; S&P futures are currently -9.8.
Notable pre-market Calls include Upgrades: PALM at Morgan Keegan, BBEP at Wachovia and AG Edwards; Downgrades: AXP at Merrill, IMCL at Friedman Billings... Today's Earnings calendar is empty... On the Economic calendar, Aug Industrial Production (consensus 0.3%) and Capacity Utilization (consensus 82.0%) will be released at 9:15ET, while July Business Inventories (consensus 0.3%) and preliminary Michigan Sentiment (consensus 83.5) will be released at 10:00ET.
Gapping down on weak earnings/guidance: LSCC -9.2%... Brokers (BoE provides emergency funding to Northern Rock, AXP downgraded at Merrill Lynch, DB and CS downgraded at Societe Generale): BSC -2.3%, GS -2%, LEH -1.9%, MS -1.3%, JPM -0.8%... Other news: SHPGY -9.2% (Vyvanse hyperactivity medicine misses analysts estimates.), BSC -4.9% (WSJ article "Barclays's ABN bid is ripe to spoil"), JASO -4.4% (Terminates agreement with former PowerLight Corporation), IMCL -4% (downgraded at Freidman Billings Ramsey), BOBJ -3% (downgraded at First Albany), CFC -3% (Wachovia lowers mortgage production estimates)
Gapping up on news: GGBM +9.0% (received an order for two 100 megabit WiFiber links from MetroNext), UNG +4.2% (nat gas recovering much of yesterday's losses as seasonal buying ramps up, traders look at yesterday's selloff as a buying opportunity, with Tropical Storm Ingrid also contributing to the strength), CRXL +3.2% (co announces that its researchers have discovered a monoclonal antibody that is active against H5N1 avian influenza), FTEK +2.9% (upgraded to Buy at ThinkEquity), NGSX +2.5% (profiled in Inside Wall Street - BusinessWeek Online), RIMM +1.3% (tgt upped to $110 at RBC, initiated with an Outperform & $100 tgt at BMO).
Gapping up: BRLC +2.0%, JRJC +2.0%, SNDK +1.5%, RIMM +1.3%... Gapping down: SHPGY -5.1%, BCS -4.8%, REP -3.0%, GFI -2.9%, BBL -2.7%, CFC -2.7%, GOLD -2.6%, RTP -2.4%, BOBJ -2.3%, CCL -2.3%, LEH -2.1%, INTC -2.0%, CS -2.0%, GM -1.9%, BP -1.8%, HBC -1.8%, ALU -1.8%, DB -1.7%, GSK -1.6%, BHP -1.4%.
INTC downgraded to Neutral from Buy at Merrill
6 comments:
Alot of foreign stocks, ex Chinese.
Looks like a short fest coming.
Agree BL. If NQ futures can't break above 2012.5 after the open, it will be a nice setup for shorts.
And a reversal it is folks. Interesting 1 min charts naz >$60 and compare to QQQQ at the open: usual suspects...aapl rimm bcsi pcln drys, some Chinese...fxi lfn ach. Nice point(s) moves Jamie. Follow the $?
Huge volume on the futures NQ on that BO at 2012.5. Starting to see long upper shadows on last four 15 min sticks. Think we start giving back.
11:10 EST
Jamie,
Thanks again for setting my MA's straight on IMCL :-)
I have two sources for backfill, one 5 days and one 10 days. I had left it on the 5 day source by mistake.
On the IMCL trade, after you took a partial at 39.90 did you come close to unloading the balance on bar 15-16 ? Was your stop moved to 2 tick above the 11th bar high ?
I actually covered on the 18th bar and my stop was at 40.62 at the time. I did not like the 14-16 bars.
GT,
I took a partial as price came into the 200 MA. The bearish engulfing bar (bar 15) gave me pause. I was hoping it was just an offset during midday dead zone. But I was ready to fold if the next bar closed green.
Yes , that was my stop. As soon as price closed below 200 ma , I lowered stop just above bar 18. Covered balance on third last bar as price came close to $39.00.
This is a new setup for me so I did not risk my usual amount. Different psychology when the risk:reward is substantially lower.
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