Tomorrow's Gameplan

Google (GOOG) reported a stellar quarter after the bell, handily beating eps estimates by 11%. I'm guessing we'll be up off the news tomorrow (tech anyway), but this rally has been long in the tooth since Friday. If we are up, I'll be using it as an opp to close out my longs and add to my shorts. It's hard to get short into Apple's (AAPL) earnings due out Wednesday after the bell, but this market has been OB for a while. I'd rather miss some upside and perserve capital, than get caught too exposed.  If anything, let's pray Apple (AAPL) is down Monday so we can get in before earnings, but don't count on it. I promise we'll have a better entry point than tomorrow. I started a position in Western Refining Inc. (WNR) which is red hot right now. I started another position in $VXX and will open one in $FAZ if we have a real melt-up. PLEASE BE WARNED: There is pain ahead in this market so don't get caught up in the "jubilation" tomorrow.

This is not a recommendation to buy or sell any securities. DAK was long AAPL at time of publication but positions can change at anytime.

Risk Off

So jobless claims we're basically in-line with estimates coming in at 423,000, a fall of 9,000 offering us no help. FedEx was even worse news coming out and saying they're feeling the global slowdown even in China. Futures are falling of a cliff and suggest a market open right near the lows of the year. So in 1 1/4 sessions we're giving back the entire rally off the lows that took us a month and a half to accomplish. It looks like those that suggested the entire rally was built on anticipation of QE3 were dead on. I didn't see it that way. I'm still having a hard time believing its a bad out there as the numbers suggest. July was horrendous and August was pretty rough too but it already feels better to me. I guess I'm crazy. With all this selling you'd think total "risk off" situation, right? So what's the "risk off" trade doing this morning? Down over $70 to $1735 per troy ounce. You'd think if people are selling stocks the money would go into gold. So where's the money going? That juicy 1.8% yield you get in the Ten-Year? I doubt it. Oil is coming off 5% and the Euro has fallen to $1.345. Calmer heads could prevail by day end so I would caution against panic selling and getting short, but watch 1120 cause if we breach it could get ugly.

Thursday Preview: Jobs and Fedex

After today's violent decline this market will need some major help to escape further losses tomorrow. We have jobless claims at 8:35 AM which are expected to be 425,000 after rising to 428,000 last week. If we can get below 425,00 it should be positive, but we'll probably need a pretty big beat to reverse the direction of this market. For the last month the market has shrugged off weaker economic data in anticipation of QE3 coming today, but since the policy decision today wasn't enough to satisfy the traders, I feel bad economic data will be a big weight on the market going forward. Economic bellwether FedEx, announces before the bell and that should give us a pretty good view of the health of the (corporate) economy. The selling may have been a bit over blown today and I wouldn't go shorting much if we open up lower tomorrow. Things may not seem so dire by the end of the day....

Fighting for control

The markets are shifting between gains and losses this morning after Italy's credit rating was downgraded overnight. In the coming days Ben Bernanke will be the story as the Fed meets on policy decision and we see if more QE is in the cards. Jazz Pharmaceuticals (JAZZ) is on the rise this morning after announcing a take-over of Azur Pharma. Autozone (AZO) beat estimates but is selling off this morning as investors were expecting more. I'm holding on to my Autozone (AZO) calls regardless. Hansen Natural (HANS) continues to breakout and reaches another new all-time high of $93.47. Apple (AAPL) is also continuing it's winning ways, rising by more than a percent to $417. I'm not doing much except taking some profits on my winners like Apple (AAPL) and anthenaHealth (ATHN) before the Fed meeting since I have no idea what to expect. Gold is rising in anticipation that we'll get more stimulus and the "print-happy" central bank will show no sign of abating. In my opinion QE3, or "Operation Twist", or whatever you want to call it isn't necessarily coming, and many traders believe this market has already priced it in. Disappointment could mean a big sell-off.

This is not a recommendation to buy or sell any securities. DAK was long AZO, AAPL, HANS, and ATHN at time of publication but positions can change at anytime.