“I got into trading in college. The first stock I purchased cost me $2.89/share; 10 months later it hit a high of $7.79/share. That’s a 170% appreciation per share. I worked for a couple of firms then decided to branch out on my own because I didn’t want to be assessed based on how much money I brought into the firm, I wanted to be graded on how much money I made for people. I enjoy conducting independent research, generating independent ideas, and monetizing those ideas in the markets. I also possess a passion for business. I like watching things become something out of thin air. I’ve experienced and continue to experience what it’s like to start a business. I’ve also experienced what its like to start fresh at investing or trading in Stocks, FX, Futures, etc. So, I created this site to re-experience these things with others”

                                                                                                                                           Lamarcus R. Coleman, MBA

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October 18, 2012 · 9:39 pm

Pre-Market Wrap 1/14/14

Stocks finished yesterday in the red being led lower by the Nasdaq which was down by -1.47%. The S&P futures are trading higher after piercing the 1813 handle but holding resistance near 1814. The CBOE Volatility Index finished the day in the green by 9.4%.

In overnight trading, European indices were mostly in the red with the FTSE being the sole index in the green, up by 15bps.

Asian stocks were broadly lower being led down by the Nikkei which was down 3%. The Shanghai Composite was the only bright spot in the session and finished up 86bps

Global yields were mixed with the US 10 year up @ 2.85%, the German 10 year down @ 1.82%, the Japanese 10 year down @ .662%, the U.K. 10 year up @ 2.84% and the Spanish and Italian 10 years down @ 3.82% and 3.88% respectively.

In early trading, commodities are mostly in the red with Silver, Gold, and Corn all down 39bps, 23 bps, and 60 bps respectively. Brent is also in the red down 16bps. WTI and Nat Gas are in the green, up by 41bps and 1.18% respectively.

Markets traded higher as retail sales came in better than expected. The USD strengthened against the majors and the S&P Futures coninted to move higher before meeting resistance. These numbers brings some relief to the markets folowing the disappointing employment figures from last week.

In overnight trading, Euro Industrial Production numbers came in better than expected. UK. inflation, PPI, and retail price index data was mostly in line with expectations.

The Euro strengthened overnight after finding support at the 1.3650 area. Resistance is near the 1.3700 area. Since, the Euro has remained within a range of 1.4660 qand 1.3685. The Euro pierced the 1.3655 area but could not overcome buying pressure.

The USD/JPY traded higher overnight finding resistnace near the 103.70 area. The 103.550 area has served as support since the overnight session. A break below this area could see a test of the 103.35 and 103.25 areas. The USD/JPY pierced the 103.750 area on the back of positive retail sales data but couldn’t hold.

The Aussie traded lower overnight but has since found support in the .8990 area. The .90150 area should serve as key resistance.

The Sterling strengthened in overnight trading, meeting resistance in the 1.6445 area. Later, the Cable, after finding support at the 1.6400 area, retested the 1.6445 area and has since traded in a narrow range.

The USD/CAD moved higher overnight but has traded choppy. The pair pierced the 1.0910 area but couldn’t overcome selling pressure. The CAD pierced the 1.0885 area but buying interest moved the pair higher within its overnight support area of 1.08914. The 1.0897 area is the next resistance level.

 

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Market Wrap 12/30/13

Mid-day stocks are basically flat with the S&P 500 and Nasdaq hovering around a 9bps decline and the Russell and Dow hovering around a 3-4bps increase. Crocs has been an outperformer on the day on the back of a key investment from Blackstone. Mid-Day the stock is up 20%.

In the American session, Canada’s TSX is trading slightly higher posting a 2bps increase. The Bovespa is also in the green by 84bps.

European stocks finished the day mostly in the red with the Stoxx down 17bps, CAC down 5bps, Dax down 39bps and FTSE down 29bps. A bright spot in the area was the FTSE MIB and IBEX which finished near flat up 6bps and 2bps respectively. In the Asian session, stocks were mostly in the green. The ASX, Hang Seng, and Nikkei all closed higher posting gains of 61bps, 1bps, and 69bps respectively. The Shanghai Composite and Sensex finished the session down 18bps and 24bps respectively.

The CBOE Volatility Index is trading higher today up 6.5%. The index is in the red over the past 5 days, down approximately 3%.

Commodities are lower on the day with WTI and Brent both in the red by 1%, Gold posting a decline of 83bps, and Silver down by 2.17%. Corn and Gasoline are trading lower posting a decline of 93bps and 63bps respectively. The bright spot continues to be Nat. Gas which has been the best performing commodity this year up 1.13%.

In today’s session, yields have come down slightly with the US 10year yield now at 2.97%, German 10 year at 1.94%, Italian 10 year at 4.11%, U.K. 10 year at 3.03%, Spanish 10 year at 4.18% and Japan 10 year at .732%.

US pending home sales numbers were slightly worse than expected. Pending home sales rose MoM by 2bps lower than the 1% expectation. Yet, the numbers were better than the prior revised numbers at which sales posted a 1.2% decline. On a YoY basis, pending home sales remained steady with prior numbers posting a 1.6% decline YoY. The Dallas Fed Manufacturing numbers were also released intraday and came in better than expected posting an increase of 3.1. This beat the consensus of 2.0 and also the prior number of 1.9. In overnight trading, Hong Kong’s balance of trade deficit widened to -44.6B. This number was worse than expectations. The consensus was for a -39.9B which is a greater deficit than the prior trade balance of -38.1B.

The Greenback weakened against the majors. The Euro strengthened in overnight trading and is trading in the 1.3800 area. In prior sessions, the Euro pierced the 1.3900 area but was unable to hold. This pierce was a great short entry point based on my prior analysis. The Euro continues to trade in a rising wedge pattern. The US data has outperformed that of the Eurozone’s in recent times. This was the bias I held in making a December Taper prediction. The retrace back to the 1.3800 should serve as another entry to the short side. I would look to hold the short position to the 1.3100 area, taking profits and tighten my stops in the 1.3500 and 1.3300 areas.

The Aussie strengthen against the Dollar in overnight trading. After the 1st Taper, the Aussie broke the key support area of .8900 but has since retraced and is trading just above that support area. From a technical perspective, I would be looking to go long the Aussie. If we don’t hold the .8900 area, we have a ways to fall to the next support area of .8200.

The Pound strengthened overnight and during intraday trading. In the prior session, the pound came very close to piercing the 1.6600 area. The next resistance area is around 1.6560. The 1.6440 area should serve as short term support. If this area is broken, the next support level should fall within the 1.6320 area.

Dollar Yen weakened in overnight trading but has since found support within the 105.000 area. In Friday’s session, USD/JPY strengthened and continued its upward trajectory in trading on Sunday, later to find resistance at the 105.40 area.

USD/CAD experienced a selloff that started late Sunday. The pair found support near the 1.0700 area early in overnight trading, but moved lower once this area was cracked around 9am EST and found support at 1.0640 area. This area is the 76.4% retracement of the prior move up that began on Friday. If this support area is broken, the pair could test the 1.0615 area, and later test the 1.0580 area. If we hold this support level, the pair could trade back up to the 1.0735 area.

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Market Wrap 12/20/13

As expected, we got our first Taper out of the way on Wednesday. The Fed decided to cut asset purchases by 10 billion. Further deceleration will be predicated on the continued expansion of the economy.

In recent times, stocks have began to trade higher after selling off some on Thursday. Today the Dow, Nasdaq, and S&P 500 are all in the green posting gains of .51%, 1.01%, and .60% respectively. Indices in Asia closed mixed with the ASX, Sensex, and Nikkei all in the green with 1.21%, 1.79%, and 7bps respectively. On the flip side, the Shanghai Composite and Hang Seng both finished the session down 2.02% and .33% respectively. Canada’s TSX is currently trading higher in the session. European indices are in the green across the board with the Stoxx posting a 56bp gain, CAC 51bps, DAX 69bps, and FTSE with a 32bps gain.

10 year yields have fallen some on the day in the U.S., Germany and U.K. posting 2.9%, 1,87%, and 2.94 respectively. In contrast, yields Italy, Spain, and Japan have risen to 4.12%, 4.13%, and .68% respectively.

Overnight the BoJ left interest rates steady. The U.K. also posted GFK confidence numbers that were slightly worse than expected.

The Euro, after bottoming out in the 1.3626 area, traded higher in the overnight session. The Euro tested the 1.3700 area in early trading today but was quickly rejected. I still maintain a short bias on the EUR/USD.

USD/JPY rallied on the back of the first taper on Wednesday but since then has slightly tapered off. The USD/JPY traded higher in the overnight session but has seen some profit taken in early trading.

The GBP/USD is traded within a range of 1.6369 and 1.6334 in overnight and early trading, rejecting breaks of both resistance and support.

USD/CAD rallied on Tapering on Wednesday, but later sold off on Thursday. In overnight trading, after finding a bottom on Thursday in the 1.06 area, USD/CAD trade in a tight range before breaking out to the upside in early trading Friday. Since then, USD/CAD has retraced its move higher and is trading near the 61.8% retracement area of the prior move.

After breaking the key support level of .8900 on Wednesday, the Aussie has since traded higher just above this level.

Commodities are broadly trading higher as the Dollar takes a breather. Brent crude is 1.01% to the upside, Nat. Gas 25bps, Gold, 96bps, Silver 1.53%,  and Corn is 11bps to the upside. WTI is the exception trading slightly in the red, down 14bps.

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Pre-Market Wrap 12/18/13

It’s Fed day and it seems as though the markets are preparing for a possible Taper. The markets have a risk on sentiment with equity futures pointing higher, treasuries trading lower, the Aussie trading higher and Franc and Yen lower.

Overnight, the Greenback, which fell after the close yesterday, managed to rally against the majors. The Euro which finished the day barely in the green yesterday gave up 30+ pips overnight. German IFO figures came in mostly in line with estimates. The Euro is currently under heavy selling pressure going into the Fed Announcement.

US stocks finished the day down, but not by as much as you would expect given the probability of Tapering. Futures are in the green, pointing to a possible higher open in the equity markets. The US 10 year is giving back its gains as yields rise on the possibility of less demand from the Fed. The US 10 year is at 2.87% in early trading. German 10 year yields are also rising and are 1.84%, followed by UK, Italian, and Spanish Yields which are all higher at 2.09%, 4.08, and 4.15% respectively.

Despite USD strength, commodities are slightly higher. WTI +13bps, Gold +15bps, Silver, +48bps. Nat. Gas is also trading higher. Corn and Brent Crude are both in the red.

Asian stocks finished the session mixed with the ASX and Shanghai Composite both in the red, -14bps and -13bps respectively, but seeing the Hang Seng and Nikkei in the green, +32bps and 2.02% respectively. In Europe, stocks are green across the board being led higher by the FTSE MIB at 1.12% and DAX at 1.08%. The CAC, FTSE, and Stoxx are all higher posting +.83bps, +28bps and +.91bps respectively.

There wasn’t a heavy flow of economic data overnight. However, the U.K. did release labor data which beat expectations. The unemployment rate fell more than expected, falling to 7.4% vs 7.6%Claimant counts also beat falling by 37k vs 35k. The BoE also released its MPC minutes in overnight trading. The Pound is trading higher on the back of this news.

The USD/JPY strengthened in overnight trading which correlates with the Nikkei gaining more than all other indices in Asia trading. USD/JPY pierced the 103.20 area but couldn’t hold and later found support in the 103.02 area. 103.100 is short term resistance followed by the 103.426 area. The 102.00 area is key support. If we break below this area, I would target the 100.20 as the next level of support.

The Aussie is still holding key support of .8900. A break below this level would open up the prior low of .8200 from July 2011. The AUD/USD recently completed a H&S pattern and should be a good long play should the Fed surprise the market with no tapering. The .9200 area serves near term resistance.

The Loonie continued to weaken against the Greenback in overnight trading. Canada’s wholesale sales numbers did come in higher than expected. USD/CAD is trading near a key resistance zone. A break out above this area could see a re-test of the 1.07 area. 1.06 area remains as key support.

FedEx(FDX), General Mills (GIS), Oracle (ORCL), Paychex (PAYX), and Lennar (LEN) all report earnings today.

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AAPL: Apple Should Pullback….Go Long on the Dip

Investors have had quite a ride in Apple (AAPL) since September of last year, at which time the stock began its massive decline from $703 to bottom out in the $385 area in April of this year. Apple later retested this area in late June, forming a double bottom pattern before rallying to this year’s highs. Apple appears to have completed the transition from a growth play to a value play. In prior years, Apple was sought after due to its continued innovation. Once the firm began maturing and new product innovation slowed, traders switched their bias and the stock became a value play.

Apple continues to look good fundamentally. The stock is trading at 14 times earnings. With a dividend of $12.20, at current levels, Apple has a yield of 2.20%, above its industry average. The company had no debt from 2009-2012 and even at its current leverage, the firm still has a debt/capital ratio of 12% which is well below the industry average. The firm’s quick ratio is also below the average of the industry indicating that the company will have no issue servicing its debt. Apple’s ROE and ROA 31% and 19% respectively, are both above the industry average. Net and Operating Margin also exceed that of its industry.

While Apple looks good fundamentally and as a long-term investment, the stock is just 3.5% off of its 52 week high. Apple, while leading the industry in revenue growth over the trailing twelve months, lagged the industry in revenue growth in its most recent quarter. EPS growth in the most recent quarter and trailing twelve months have also declined.

With the Fed likely to Taper within the coming months, this could present a key opportunity to scale into or add to an existing Apple position. I expect the Fed to Taper in December. However, March is the latest that most traders and economist expect Tapering to begin. Tapering, while beneficial to the broad economy, will result in a pullback in the equity market as traders price in the effect of less financial stimulus. After a significant correction, investors should begin to buy up stocks trading at advantageous multiples. I feel that Apple should be one these stocks.

I would look to begin scaling into Apple around the $495 area. Applying Elliot Wave Theory, Apple is currently ending the 3rd Wave. The stock experienced a Fibonacci retracement of 50% in the 2nd Wave which is not minor, but also not a typical retracement in the 2nd Wave. Applying the rule of alteration, I would expect Apple to pullback in the 4th Wave to somewhere within the $495-$510 area. This should be a good spot to begin scaling into a position.

AAPL Daily Chart

AAPL Daily Chart

(click to enlarge chart)

Based on the projected retracement, we can draw channel lines to determine the impending chart pattern set-up. Based on the chart below, it appears that Apple could form a rising wedge in the coming months which would indicate that the stock could fall below the $495 area to bottom out possibly near the $450 area. To confirm this pattern, the 5th Wave to the upside would have to fail to exceed the top of the 3rd Wave. If the stock trades to  the 38.2% Fib. retracement area in the 4th Wave and holds, I would reconsider my original target and begin scaling into a position at the $520 area with a profit target in the 5th Wave of $610.

AAPL Possible Rising Wedge Projection

AAPL Possible Rising Wedge Projection

If Apple does trade above the 3rd Wave, the chart pattern developed could be that of a flag which will signal a continuation higher. We can use Fibonacci tools to project our price target.

AAPL Possible Flag Projection

AAPL Possible Flag Projection

Taking the fundamental data and technical analysis into consideration, as well as the likelihood that the Fed will Taper in the coming months, I feel that Apple should sell off to the at least to the $510 area and later extend higher. One could play this trade in the options market by collaring a current position (collar=long put and short call) to hedge the short-term downside risk. The long put, out of the money, should be bought around the $540 area. I would then sell a call against it at the $595 area. Another strategy that one could use once the 4th Wave down was complete, to preserve capital, is to put on a synthetic long position, or sell a put and buy a call at the same strike price. With implied volatility exceeding historically volatility, options premiums will be higher on the Feb595Call which would generate a credit of about $12  Price would have to exceed the $595 level by Feb. expiry for you to lose your credit which I feel is unlikely. The market is pricing in a pullback which is why implied volatility on puts exceed that of historically volatility, thus elevating premiums. On the Collar’s long put at the $540 area, for Feb. expiry it cost about $22 for a net debit of $10 for the trade. If the stock falls to $510, the trade would profit $325 for a 3:1 risk/reward. If the stock falls to $495 by Feb expiry, you would have a $443 profit and a 4:1 risk/reward ratio.

As a risk management precaution, if the Apple breaks the 3rd wave high of $573, trading up from current levels, I would close the trade at a loss of about $125 and reassess the environment.

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Post Market Wrap 12/17/13

Going into the big announcement tomorrow, stocks finished the day down. The S&P closed -.36% lower. The Dow was closer to being flat, down only 6bps, and the Nasdaq finished down only 14bps. Even though indices closed lower, the numbers don’t look that bad going into a possible Taper tomorrow. You would think that the S&P would have given up at least 1.5% as the market readies for less of the financial morphine.

The USD started the day off strong, gaining against the majors. Yet, by mid-day the Greenback began to lose steam. The Dollar finished the day down. Some traders could have taken profits and felt averse to holding positions overnight going into tomorrow. The US 10 year closed higher with yields continuing to fall, now at 2.84%. Despite the change of course for the dollar, commodities finished the day lower. WTI finished the day down 17bps, Brent Crude closed down 1.08%, Gold -1.13, and Silver -85bps.

Among the best stock performers were iRobot Corporation (IRBT) which closed up 18.21% and KKR Financial Holdings(KFN) which finished the day up 29.10%.

The Euro traded lower in early trading, but found a bid mid-day to finish the day slightly higher. I still maintain a short bias on the EUR/USD going into the FOMC meeting and beyond. The Euro is trading within a rising wedge pattern. This, in  conjunction with EU vs US data, is the basis for my bias. The USD/JPY finished the day lower. The Pound closed the day lower but traded off of the lows of the session. The USD/CAD finished the day higher and could pull back to the 1.0591 area before trading higher. The Aussie managed to bounce off of key support at the .8900 area. to finish the day slightly lower. If this holds, the next area of key resistance will be within the .9150-.9200 area. If the Fed surprises the markets tomorrow and doesn’t taper, I would definitely look to go long the Aussie with a profit target within this area.

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Market Wrap 12/17/13

Stocks open trading lower, giving back some of the gains from Monday. The US 10year is trading higher, with yields falling to 2.87%. The USD has strengthened overnight against the currencies of other major economies. German Bunds are higher as yields fall to 1.83%. U.K. yields are 2.8% while Japan’s 10 year gains sends yields to 66bps.

In Asian trading, stocks finished the day mixed with the ASX and Nikkei in the green and the Shanghai Composite and Hang Seng in the red. In Europe, stocks are down across the board even as German ZEW figures blew past expectations. The Stoxx is down 50bps, CAC -1%, DAX-40bps, & FTSE -50bps. Canada’s TSX is practically flat, just in the green 3bps.

Downward pressure in the EUR sends EUR/JPY and EUR/CHF lower. The markets appear to be trading with somewhat of a risk off sentiment as stocks fall, and the USD and Yen strengthen. Commodities are also down as we begin the first day of the FOMC meeting. WTI is slightly higher at 50bps, Brent Crude is down -55bps, Gold -50bps, Silver -60bps. Nat. Gas is also trading lower. The VIX is trading higher up 3% in early trading.

The Euro, Pound, Loonie, Kiwi, and Aussie all weakened in overnight trading while the USD/JPY is mostly flat. The Aussie is trading near a key support level of .8900. This is the same level in which we formed a double bottom back in August and September before we had 800+ pip rally into mid October. Since then, in November, we formed a head and shoulders pattern and broke below the neckline to arrive back at this key support level. On this trade, my short entry target was on a break beneath .92963 with a ultimate profit target of .8900 with a short term profit target of .9200 to test whether or not we would get a break at that level. Once we did, stops could have been tightened. If you followed suit, you picked up 400+ pips over the last month. If we break key support on the AUD/USD, the next key area of support will be the July 2011 bottom at .8200.

U.K. inflation also came in at 2.1% vs 2.2%. The US inflation rate came in at 1.2% vs 1.3%. Core inflation was inline posting 1.7%. The current account deficit in the US also narrowed.

Next Key Support is the July 2011 bottom of .8200

Next Key Support is the July 2011 bottom of .8200

 

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Post Market Wrap 12/16/13

Stocks finished the day higher today after having dismal performance last week. The Dow, Nasdaq, and S&P all finished in the green Monday at .82%, .71%, and .63% respectively. The US 10yr yields fell marginally to 2.88% while German yields were flat at 1.838%, Japan’s 10 yr yields fell to .69%, and U.K. yields maintained 2.88%. Commodities were lower across the board with WTI down 18bps, Gold down 25bps, and Silver down 70bps. The VIX continued to strengthen going into the FOMC meeting and finished the day up roughly 2% . The VIX has gained 19% in the last five sessions.

In Asian trading, stocks are mixed with the Asia Dow, ASX, and Nikkei all in the green, while the Hang Seng and Shanghai Composite are in the red. European stocks closed higher with the Stoxx gaining by 1.26%, CAC up by 1.48%, the DAX up by 1.74%, and FTSE up by 1.28%. The gains in European Indices can be attributed to the better than expected PMI figures out of the Euro area.

The USD weakened in early trading but bounced off the lows of near the 80 area to finish the session slightly higher. The Euro strengthened in overnight trading but completely retraced its gains by mid-day to bottom back near a key support area of 1.3740, later to bounce off that area but to hit resistance at the 61.8% retracement area of the prior move down. The Yen finished the session higher but off of the highs of 103.100. The GBP posted a brief rally early Monday but later cracked support of 1.6296 area, near the days open, to close basically flat. The Loonie rallied early but gave back all of its gains by mid-day. Later the USD/CAD bounced off the 1.0570 area to finished the day higher. The Aussie started trading Monday in a down trend but found support near the .8925 area and rallied higher throughout the session. AUD/USD managed to finish the day higher near the 61.8% area of the move up.

The RBA also released minutes from its last meeting at the beginning of the Asian session at which the Aussie gained 20 pips, completely retraced the move, then strengthened on the back of commentary out of Australia. The AUD/USD pierced the .8956 area but couldn’t overcome selling pressure.

Early Tuesday U.K. inflation and German ZEW Survey figures will be released followed by U.S. inflation at the American open. At the beginning of Asian trading Tuesday data for Japanese trade and the RBI interest rate decision will be out.

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12/13/13 Post Market Wrap

This month has been one of the worst for stocks with the Dow and S&P down 1.29% and 1.27% respectively. This past week was no different. The Nasdaq, which managed to hold on to 38bps on the month, closed this week down 1.51%. The S&P and Dow finished the week in the red 1.65% mutually. Stocks have sold off as traders take profits and price in a Taper Wednesday.

US 10 Year Yields rose this week seeing price falling near a key support level on the daily chart at the neckline of a H&S pattern.

The Euro practically gave back all of its gains from earlier in the week as it approached the 1.3800 area. On Friday EUR/USD managed to come off of the lows of the session to close at 1.3740. We could see the 1.3700 area broken in early trading next week as traders position themselves for Tapering on Wednesday. Leading up to Wednesday, the EUR/USD could find a short term bid on the back of Euro Area & German PMIs out Monday, and German ZEW Surveys out Tuesday( economic sentiment index) and Wednesday(economic sentiment) leading up to the FOMC announcement. Disappointing figures will add fuel to the EUR/USD selling going into the FOMC announcement.

USD/JPY finished the week slightly higher after coming back from the lows on Wednesday and hitting new highs on Friday. In Sunday’s Asian session we get Tankan figures which could continue to strengthen the Yen if better than expected. The next significant data point out of Japan leading up to the FOMC announcement will be balance of trade out on Tuesday. On Thursday we have the BOJ’s rate decision. The Cable weakened to close the week down as traders took profits in the best performer going into next week. We have a lot of data coming out for the U.K. that could impact the GBP/USD. Tuesday U.K. inflation data and Wednesday unemployment rate, claimant count change, and MPC minutes. The Loonie closed lower last week, retracing 76.4% of the rally on Thursday. There are no significant data points out this week for Canada so the USD/CAD should trade on Taper expectations. The Aussie finished the week lower. Monday the RBA minutes are released but shouldn’t impact trading. No other significant data points out of Australia for the week.

On Friday Nimble Storage (NMBL), YRC Worldwide Inc (YRCW), Martha Stewart Living (MSO) and Adobe Systems (ADBE) beat the market posting gains of 61.90%, 27.30%, 26.91, and 12.98%. Given the probability that futures will open lower going into the FOMC meeting, these should be good stocks to fade.

Earnings to watch for next week are FedEx (FDX), General Mills (GIS), Lennar (LEN), Oracle (ORCL), and Paychex (PAYX) out Wednesday. Carnival (CCL), Cintas (CTAS), (Darden (DRI), Red Hat (RHT), and Rite Aid(RAD) are expected to report Thursday. Discover (DFS), Finish Line (FINL), and Walgreens (WAG) report Friday.

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Market Wrap 12/12/13

Stocks are down yet another day. The US 10 year yields continue to rise as the market prices in a possible Taper. In today’s session German, Japanese, and U.K. yields rise along side of the U.S. Global equities across the board are all in the red. Today Lululemon (LULU) beat earnings expectations. The VIX is also trading near a 1mo high.

The Greenback continues to strengthen against all majors as traders position themselves for a Dec. Taper following blowout retail sales numbers. Commodities are also down, with the exception of WTI which is slightly positive and Nat Gas which saw a decrease in storage which fell 81 billion cubic feet, being led lower by Silver (-4%) and Gold (-2%).

In overnight trading, RBNZ left rates unchanged, Aussie employment beat expectations, French CPI was unchanged, the SNB left rates unchanged, and Italian CPI declined 3bps MoM to post a 7bps annual rate. South Africa Industrial Production, Brazil Retail Sales and Canada Home Price Index all missed estimates. The EU & India Industrial Production figures came in worst than expected. The next data point today that may solicit some attention is Japan Industrial Production.

Retail Sales numbers out of the US was by far the most important data point as it gives traders support for a Dec. Tapering bias. I maintain my view that a Taper should take place in December and feel that the USD will continue to strengthen. The only key data point for the US leading up to the Dec. FOMC is Inflation data that will be out on Dec. 17th. Given the trend in inflation, I don’t expect this report to be material in trading. Inflation has lagged. A key reason for watching inflation is to determine how long the Fed could possibly continue easing. Inflation has not forced the Fed to rush Tapering. In lieu of this, this report should not change the markets Dec. Tapering bias.

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