11:30pm (EST)

 

1.  Market Summary 

2.  Revisiting Biodel (BIOD)

3.  Earnings

4.  Weekly Wrap Portfolio Update 

5.  Week Ahead

    

(To view the charts, please log into the Members Area and go to the Weekly Wrap Premium section)

 

= = = = = = = = = = = = = = =  

 

1.  Market Summary   

“This past Monday was a negative close for the market and had it been positive, we might have factored in a possible trend change as it would have been the third-straight positive Friday/ Monday close for the market.  Futures were showing a strong open last Sunday night when we went to press but Monday ended with a 250-point swing on the Dow after a nearly triple-digit gain at the open.

We saw signs of the VIX tripping 25 which still has us feeling bearish and we don’t believe the upcoming earnings cycle is going to be a good one. If companies are going to miss expectations, the next 2 weeks will be the time they confess. 

We also mentioned the week after June options expiration is extremely bearish, historically, for the market and last week’s economic news was lousy.  There are a number of key events this week so no matter where the market ends on Monday it will only be a start of something better or worse to come.  The bulls will need a lot of headlines to go their way to keep a sustained rally going while the bears are hoping fundamentals take over.” (from 6/17/2012 Weekly Wrap/ Monday Morning Outlook)…

The aforementioned tidbits were right on cue as many of the events we expected to move the market, did.  The bulls got the news they wanted as Greece put in place the government they needed to stay in the eurozone, at least for now, while the Fed announced an extension of its “Operation Twist” program until the end of the year.

The market ran on a sugar high until Wednesday after hearing the Fed news but ended slightly lower after testing key resistance levels.  We said there we a few more lines of defense the bears were holding before there would be a trend change and Hollywood couldn’t have written a better script.  We said in our Daily on Wednesday afternoon the market could be reaching its peak and Thursday morning, futures were mixed.

The bears got the news they wanted to hear as the Philly Fed results were a disaster.  The survey came in at (-16.6) and nearly tripled the previous month’s (-5.8) negative activity.  Anything below zero shows contraction.  We warned our subscribers Thursday morning before the open this number could weigh on the market (along with jobless claims which showed no improvement).  As the debate heated up on what little the Fed had accomplished, the selloff picked up pace as the market ended the session 2% lower. 

There were also a number of high profile earnings warnings from Adobe (ADBE, $31.57, up $0.34), FedEx (FDX, $90.54, down $0.09), Pepsi (PEP, $68.70, up $0.20), Philip Morris International (PM, $86.01, up $0.41), Proctor & Gamble (PG, $59.83, up $0.08) and Ryder (R, $35.44, down $5.31) just to name a half-dozen.  The S&P Volatility Index ($VIX, 18.11, down 1.97) went ballistic.

This week’s action could be just as exciting and we have a ton of chart work to cover.  If our forecast is right, last week’s bear victory is only the beginning of a major meltdown for the major indexes but we can never count the bulls out, especially if they hold support.

The Dow added 67 points, or 0.5%, to finish at 12,640 on Friday.  The blue-chips traded to a high of 12,877 on Wednesday’s push past resistance and into the 12,800-13,000 area where we said a possible trend change could occur.  Thursday’s 2% selloff pushed the Dow back below the 12,600 level as the index fell to a low of 12,561 intraday.  Although the bulls recovered this area before the weekend, the next wave of support will come in at 12,350 which is also the 200-day MA.  A break below this level would be bearish.  The Dow came into the week at 12,767 and fell 127 points, or 1%, for the week.  Year-to-date, the blue-chips are higher by 423 points, or 3.5%.

Longer-term chart for the Dow:   

The S&P 500 gained nearly 10 points, or 0.7%, to settle at 1,335.  The index reached a peak of 1,363 on Tuesday’s 1% surge and closed above the 1,350 level for the first time since mid-May.  The bulls were able to clear and hold the 100-day MA, briefly, but the S&P was back at 1,325 on Thursday’s plunge.  We said a break below 1,335 on Thursday would lead to additional selling pressure and the low came in at 1,324.  Friday’s close was right on 1,335 (imagine that) which still leaves the possibility for a back test to 1,350 but we are expecting a test down to 1,300-1,275 over the next few weeks.  The S&P 500 started Monday at 1,342 and gave back 7 points, or 0.6%, by Friday’s close.  For the year, the index is showing a gain of 78 points, or 6.4%. 

Here is the longer-term S&P 500 chart:

The Nasdaq jumped 33 points, or 1.2%, to finish at 2,892.  Tech traded to a high of 2,940 on Tuesday’s 2% surge and 2,942 on Wednesday’s push higher and closed at 2,930 that day.  Coming into last week, we didn’t feel as though the bulls had the strength to clear 2,900 but we did say as long as 2,900 was in the picture they were going to push 3,000.  We also said a 5% pullback would get the Nasdaq below crucial support at 2,750 (light blue line) and the index fell half of that, or 2.4%, on Thursday’s pounding to test 2,850.   The index started Monday at 2,872 and Friday’s gains gave the bulls the victory for the week as Tech gained 20 points, or 0.5%.  For 2012, the Nasdaq is higher by 287 points, or 11.1%.  

Here is a 30-month chart for the Nasdaq:     

The Russell 2000 added 9 points, or 1.2%, to finish at 775.  The small-caps kissed 789.51 and 789.22 on Tuesday and Wednesday, respectively, but once again failed to clear the 800 level which was last seen in early May.  The low on Thursday was 764 which was just above the 200-day MA and a break below this level and then 740 (light blue line) could cause some panic.  The Russell 2000 was at 775 before Monday’s open and advanced 4 points, or 0.5%, by Friday’s close.  The index is up 35 points for 2012, or 4.6%.

Here is a longer-term chart of the Russell 2000:

The S&P Volatility Index ($VIX, 18.11, down 1.97) came into the week at 21.11 and displayed some breathtaking moves.  The VIX fell 10% on Friday after soaring 16% on Thursday’s selloff to close at 20.08.  For the most part, the VIX stayed below 20 and traded down to 17.09, midweek, as the bulls were rallying.  We said there could be a push to 17.50 on further market momentum and at 15, the bulls will be pushing new highs but we doubt the market plays out this way.  The VIX was pushing 25 during the prior week and we would expect this level of fear to come back into the market if support fails to hold and the bulls can’t crack resistance.

We came into the week expecting the bears to hold resistance but there were only two technical indicators left before a possible trend change took place.  As much as we wanted to be bullish, we just didn’t trust the rally as we bought put options for our Daily and we closed a profitable trade for our Weekly Wrap instead of writing another covered call.  We did use the opportunity to sell more call options on a few stocks we like for the longer-term but we are expecting a bearish market that could last thru August or mid-September. 

Second-quarter earnings will start to trickle in during the second week of July so there could be a few more last-minute warnings this week.  Alcoa (AA, $8.62, up $0.07) and Yum Brands (YUM, $66.11, up $1.10) will announce their quarterly results on July 9 so market your calendars as they will be the first to confess on what could be a lousy season for call options but a great one for put options.       

Although the indexes are still in a “trading range”, Thursday’s 2+% pullback was a wakeup call for the suit-and-ties who were in the “risk-on” mood.  It seems now that the same talking heads and slick talking pros are in a “risk-off” state of mind which we told you will limit your possibilities on making money in the market. 

We are watching the 100-day moving averages and a break of the upper channel downtrend lines as clues the bulls haven’t given up but the momentum appears to be favoring the bears.  This is the last week of June so we could also see some “window dressing” as fund managers lock in any gains for the quarter by Friday.  It will also be the last week corporations can try to meet or beat their quarterly results so we could see some more pre-announcements if they are going to miss expectations. 

Another market moving headline this week could be the final verdict on the Affordable Care Act.  The Supreme Court should announce the ruling by Friday as this will be the last week they are in session for a few months and have run out of time.  We mentioned last week this event could impact Healthcare stocks and there will be an important FDA announcement this week on obesity drugs. 

Economic news will also play an important role in which way the market trends this week and all of these elements will cause added volatility.  We have outlined key areas of support and resistance so we will need to stay focused until we get the all clear sign. 

As we head to press, futures are showing a lower open for Monday and look like this.  Dow futures are down 55 points to 12,513 while the S&P 500 futures are lower by 7 points to 1,320.  The Nasdaq 100 futures are showing a decline of 9 points to 2,565.      

 

= = = = = = = = = = = = = = = 

 

2.  Revisiting Biodel (BIOD) 

As we have mentioned in previous recent newsletters, biotech stocks are hot as a number of FDA decisions approach and blockbuster drugs come off of patent.  The latter could lead to aggressive merger and acquisitions in the sector.  We profiled Biodel (BIOD, $2.32, up $0.01) back in January, 2011 and said it may be a few years off from a drug approval and at the time, shares were trading at $7.56.  The stock has declined considerably since then so we wanted to see if the company might be worth an investment.                                                             

Biodel focuses on the development of treatments for diabetes that may be safer, more effective, and more convenient for patients.  After attempts to get approval for its main drug Linjeta, a fast acting insulin, failed, it decided to abandon the drug, causing the stock to plummet.  

This was a major problem, because the company’s next products in their pipeline are still in Phase I trials, meaning its next product is still a long way before getting approval from the FDA. 

VIAtab™

Phase I

Insulin Tablet – Early-stage Type II Diabetes

BIOD-Adjustable Basal

Phase I

24 hour Basal Insulin

BIOD-Smart Basal

Pre-Clinical

Insulin Released Proportional to Glucose Levels

BIOD-Stable Glucagon

Pre-Clinical

pH 7 Glucagon – Treat Insulin Overdose

One step could speed up the process by using section 505(b)2 of the Federal Food, Drug and Cosmetic Act which allows a company to reference existing safety and efficiency data.  This would help speed up the process and maybe get possible approval of BIOD-Stable Glucagon by mid-2014.  All the company has to do is conduct a bioequivalence study to prove it is functionally the same as glucagon, a CMC (chemistry, manufacturing, and control) study to prove the long-term stability, and a toxicology study. 

Glucagon is a highly unstable compound that helps regulate blood glucose levels by signaling the liver to convert glycogen into glucose.  The hormone is produced naturally by the pancreas, but is not processed well in diabetics.  Insulin works opposite of glucagon, reducing blood sugar.   Thus, if insulin works faster than the body’s production of glucagon, blood sugar can get too low, causing harm to the body.  Current glucagon supplements are currently sold as an acidic dry powder which must be reconstituted into a liquid by a care-giver for injection into the patient.  BIOD-Stable Glucagon makes this process easier by being a liquid that can be refrigerated for more than a year. 

However, even if this drug were to gain approval, the glucagon market is only about $100 million, or 4 times the company’s current market cap.  Cash burn last year from operating activities was $18 million and current cash is roughly $30 million.  Thus, excluding future offerings and assuming the operating costs stay the same, the company has only about 18 months before they run out of cash. 

On June 8, Biodel partnered with Aegis Therapeutics, providing them with an exclusive worldwide license to Aegis’ proprietary ProTek and Intravail technologies for the development and commercialization of pharmaceutical formulations of glucagon.  This will help their goal of getting approval for BIOD-Stable Glucagon. 

Biodel’s three remaining insulin programs would likely take longer to get approval than the glucagon option.  The company, however, decided to take a detour and introduced two new insulin products, BIOD-123 and BIOD-125, which produced positive Phase I results in April.  Both new products are ultra-rapid-acting formulations of recombinant human insulin (RHI).  BIOD-123 contains a modified EDTA component with calcium ions to improve stability and injection, and BIOD-125 is based on Linjeta old prospects.  The Phase I data likely caused the stock to briefly spike, but the stock quickly started to trend back down.  Phase II initiation for BIOD-123 is expected to start in the 3rd quarter. 

Earlier this month, the company issued a one-for-four reverse split which reduced the number of outstanding shares from approximately 38.9 million shares to approximately 9.7 million, and simultaneously increased the share price four-fold.  In general, reverse splits are rarely a good sign.  The purpose of the reverse stock split was to raise the price to $1, the minimum bid price requirement for continued listing of on the NASDAQ stock exchange.  This purpose is different from the general idea of reverse splits, which is to make the share price more attractive to institutional and individual investors.  Most smart investors ignore stocks priced below $1, and the reverse split is designed to prevent that. 

Interestingly enough, the company agreed with a group of institutional investors to sell approximately 2.7 million shares and warrants at $2.355 per share either on or around June 27th, allowing it to raise $18.5 million.  Part of the shares issued will be common stock and part will be Series B Preferred Stock.  Each preferred share can be convertible into one share of common stock, but the group must not own more than 9.98% of the total outstanding shares.  

Warrants are tricky but for each share purchased, investors receive a warrant to purchase 0.35 shares of common stock at $2.66 down the road.  The warrants have a five year expiration date and can be exercised at any time after the issue date.  The dilution will be bad news for the stock.   

Looking at the statistics, a price/book of 0.74, an enterprise value/EBITDA of 0.38, a current ratio of 11.82, a book value of $3.11, no debt, $3.07 of cash per share, and a low short interest of 1.5% says shares could be considered undervalued.  An enterprise value/EBITDA of 4 or less usually signals a possible buyout candidate.  Its insulin technology is worth something and its current ratio, a measure of liquidity, says that the company has 11.82 times more current assets than current liabilities, so they have very high liquidity and should not have financial problems in the near-term.  That is the bullish case.

The big red flag we see are that both institutions and insiders are selling the stock in large amounts.   

Analysts seem to think the stock will rise.  At $2.32, the stock is below even its low target of $3.00 made by the 2 analysts recorded by Thomson/First Call.  The other analyst has a $15 price target, making the average target to be $7.50.  Using a scale of 1.0 as a strong buy and 5.0 as a sell, the average rating of the stock was 2.3, unchanged from a week ago.  We aren’t sure if they have adjusted their price targets to account for the reverse split.

 

Current Month

Last Month

Two Months Ago

Three Months Ago

Strong Buy

1

1

1

1

Buy

1

1

0

0

Hold

2

2

4

4

Underperform

0

0

0

0

Sell

0

0

0

0

If the company can get some of its drugs into Phase 2 and Phase 3 trials, maybe we will revisit the story, but for now Biodel seems to risky for us. 

 

= = = = = = = = = = = = = = = 

 

3.  Earnings 

The companies in BOLD, we are looking at as possible trades and we may list call or put options on them in our Daily Newsletter.  If they become official recommendations, we sent out Trade Alerts or include them in our 9am and 1pm updates that come out during the week (Quotes are as of Friday’s close, 6/22/12)

 

Monday

AAR (AIR, $12.03, up $0.28), Apollo Group (APOL, $33.55, up $0.33), Ennis (EBF, $14.71, up $0.35), Farmers National Banc (FMNB, $6.59, down $0.26), GenCorp (GY, $6.10, up $0.17), HB Fuller (FUL, $29.24, down $0.20), JDA Software Group (JDAS, $29.47, up $0.94), Mutualfirst Financial (MFSF, $10.35, down $0.16), National Instruments (NATI, $26.54, up $0.23), Park Electrochemical (PKE, $24.37, up $0.33), Saba Software, (SABA, $8.22, up $0.27), Synnex (SNX, $33.89, up $1.10)

 

Tuesday

AeroVironment (AVAV, $26.07, up $0.30), Daxor (DXR, $9.00, up $0.07), H&R Block (HRB, $15.47, up $0.15), Kewaunee Scientific (KEQU, $7.98, up $0.06), Robbins & Myers (RBN, $42.66, up $0.08)

 

Wednesday

Casella Waste Systems (CWST, $5.48, up $0.25), Commercial Metals (CMC, $11.84, up $0.14), General Mills (GIS, $38.44, up $0.08), Lennar (LEN, $26.37, up $0.28), Lindsay (LNN, $57.45, down $0.12), McCormick & Co.  (MKC, $57.87, up $0.13), Monsanto (MON, $78.45, up $0.67), Omnova Solutions (OMN, $7.67, up $0.64), Paychex (PAYX, $32.26, up $0.15), Progress Software (PRGS, $19.91, up $0.39), UniFirst (UNF, $57.52, up $0.44)

 

Thursday

Accenture (CAN, $57.56, up $0.90), American Greetings (AM, $14.34, up $0.32), AZZ (AZZ, $53.97, up $1.38), CalAmp (CAMP, $7.98, up $0.26), Family Dollar Stores (FDO, $70.43, UP $1.08), Franklin Covey (FC, $9.50, UP $0.25), Herman Miller (MLHR, $16.70, DOWN $0.23), Methode Electronics (MEI, $7.94, UP $0.39), MSC Industrial Direct (MSM, $64.97,down $0.42), Nike (NKE, $99.40, up $0.74), Rosetta Genomics (ROSG, $12.84, up $0.38), Schnitzer Steel Industries (SCHN, $24.49, up $0.53), Shaw Group (SHAW, $26.56, up $1.08), Smith & Wesson Holding (SWHC, $7.08, up $0.01), TIBCO Software (TIBX, $26.69, up $0.95), Worthington Industries (WOR, $17.41, up $0.29)

 

Friday

Constellation Brands (STZ, $19.37, down $0.13), Finish Line (FINL, $18.41, down $0.27), Investors Real Estate Trust (IRET, $7.57, up $0.07), KB Home (KBH, $8.19, up $0.30)

 

= = = = = = = = = = = = = = = 

 

4.  Weekly Wrap Covered Call Portfolio Update (Closing prices as of 6/22/12)

Closed Trades for 2012 (20-0, overall):  BAC +26%, EFTC +8%, SZYM +55%, VVUS +38%, CALL +19%, BAC +20%, SYMC +16%, DAR +20%, TIVO +5%, MGM +22%, ZNGA +13%, SGMS +6%, VVUS +17%, F +8%, AA +7%, CLNE +27%, DNDN +18%, MGM +19%, ACAS +3%, P +9%.   

 

Special Note:  We have not recommended a new position since April because we are expecting cheaper prices in the fall.  The month of May was the first sign of a summer selloff but the good news is we will see bargains galore come September/ October.  Use this time to save cash and we will manage our open positions the best we can. 

 

Solazyme (SZYM, $13.54, up $0.72) 

July 12.50 calls (SZYM120721C00012500, $1.10, up $0.40)

Original Entry Price:  $12.40 (4/17/12)

Lowered Price from Selling Options: $11.30    

Exit Target:  $15+

Return:  20%

Stop Target:  None

Action:  We sold the July 12.50 calls for 70 cents last week which lowed our cost basis to $11.30.  Shares got a nice pop on Friday and jumped over 5% after a brokerage firm issued a “Buy” rating on the stock.  Shares were up another 91 cents in after-hours to $14.45 after the close but those gains aren’t official.  The next area of resistance will come at $14-$15 which is where we could see a short-term top.  Support will be strong at $12.50-$12 if there is a pullback.  

 

We recommended buying the stock at $12.40 on 4/17/2012 and for every 100 shares to sell the June 15 calls for 40 cents.  This lowered the cost basis to $10.18.

On 6/19/12 we sold the July 12.50 calls which lowered our cost basis to $11.30.  If we are called away in mid-July at $12.50 the trade will make 11%.

 

Bank of America (BAC, $7.94, up $0.12)

August 9 calls (BAC120818C00009000, $0.18, up $0.01)

Original Entry Price:  $8.93 (4/17/12)

Lowered Price from Selling Options and Dividends:  $8.24  

Exit Target:  $15+

Return:  -4%

Stop Target:  None

Action:  We sold the August 9 calls last week for 23 cents which reduced our cost to $8.24.  Shares are on the verge of a major move as they are trapped between the 50-day and 100-day MA’s.  A break above $8.25 would be bullish.  A drop below $7.75 could spark selling pressure as it would break the uptrend line that has been in place since the beginning of the month.   

We recommended buying the stock at $8.93 on 4/17/2012 and for every 100 shares to sell the May 9 calls for 45 cents.  This lowered the cost basis to $8.48.

On 5/30/12 the company paid a 1 cent quarterly dividend which lowered our cost basis to $8.47.

On 6/19/12 we sold the August 9 calls for 23 cents to lower our cost basis to $8.24.  If shares are called away in mid-August at $9 the trade will make 9%.

 

Scientific Games (SGMS, $8.55, up $0.14)   

Original Entry Price:  $11.10 (3/20/12)

Lowered Price from Selling Options:  Waiting for shares to reach $10-$11

Exit Target:  $15+

Return:  -23%

Stop Target:  None

Action:  This is a 3-year chart for Scientific Games and we will need a move above $9.50 to get Wall Street interested in the stock.  This is home to both the 50-day and 100-day MA’s.  Shares tested a high of $9.17 to start the week but fell to a low of $8.28 on Thursday and $8.27 on Friday.  A move below $8 would be bearish over the short-term but we feel this is a $15 stock over the next year or two. 

 

We recommended buying the stock at $11.10 on 3/20/2012.

 

Arena Pharmaceuticals (ARNA, $9.88, down $1.80)

July 3 calls (ARNA120723C00003000, $7.05, down $1.70)

 Original Entry Price:  $1.88 (2/2/12)

Lowered Price from Selling Options:  $1.33

Exit Target:  $3+

Return:  616%

Stop Target:  None

Action:  Shares went parabolic, rising from $8.40 to start the week before reaching a high of $11.99 on Friday’s open.  Then, the bottom fell out for no apparent reason as shares touched a low of $7.80 just 15 minutes later.  Trading leveled off at $10 which is where the bulls and bears did battl as the implied volatility had exploded on both the calls and puts.  This means the options are still very expensive.

We have a price target of $15 for shares if there is no delay with their obesity drug, Lorcaserin, up from $10 following last week’s surge to double-digits.  The company will meet with the FDA on Wednesday so shares will likely be halted all session long.  The FDA doesn’t always follow its panel’s recommendations although the drug won an 18-4 pre-approval decision.  If there is a delay on bringing the drug to market due to additional tests the FDA might require, shares could fall to $7, or $5.50 in a worse case deal.  Our gains are capped at $3, regardless, so we will likely be called away by mid-June regardless of the outcome.

 

We recommended buying the stock at $1.88 on 2/2/2012 and for every 100 shares to sell the July 3 calls for 50 cents.  This lowered the cost basis to $1.33.

If shares are called-away by mid-July at $3 the trade makes 117% so our gains will be capped.

 

MGM Resorts (MGM, $10.99, up $0.02)

Original Entry Price:  $13.77 (2/2/12)

Lowered Price from Selling Options:  $12.67

Exit Target:  $15

Return:  -13%

Stop Target:  None

Action:  Shares are on the verge of a major move and we would like to see a run past $11.75 which is where we will look to sell another call option.  We still believe an online gambling bill will pass but it may take another 6-12 months.  If shares weaken, support at $10 will be tested.

We recommended buying the stock at $13.77 on 2/2/2012 and for every 100 shares to sell the March 15 calls for 45 cents.  This lowered the cost basis to $13.32.

On 3/20/12 we recommended selling the April 14 calls for $0.65 which lowered the cost basis to $12.67.

 

Alcoa (AA, $8.62, up $0.07)

August 9 calls (AA120818C00009000, $0.28, up $0.02)

Original Entry Price:  $9.65 (1/12/12)

Lowered Price from Selling Options and Dividends:  $8.76

Exit Target:  $11

Return:  -2%

Stop Target:  None

 Action:  We sold the August 9 calls for 38 cents which lowered our cost basis to $8.76.  Commodities have been weak so we are showing a 5-year chart which shows shares could test $7.50 (or worse) if there is a summer selloff. 

We recommended buying the stock at $9.65 on 1/12/12.    

On 1/23/12 we recommended selling the March 11 calls for $0.25 which lowered the cost basis to $9.40.

On 2/1/12 the company paid a 3 cent dividend which lowered our cost basis to $9.37.

On 3/20/12 we recommended selling the April 11 calls for $0.20 which lowered the cost basis to $9.17.

On 5/10/12 the company paid a 3 cent quarterly dividend which lowered our cost basis to $9.14.

On 6/19/12 we sold the August 9 calls to lower our cost basis to $8.76.  If shares are called away in mid-August at $9 the trade will make 3%.

Trades on HOLD:  DryShips (DRYS, $2.13, up $0.02), AKS Steel Holding (AKS, $5.55, up $0.31), Rare Element Resources (REE, $5.01, up $0.01), Newpark Resources (NR, $5.66, up $0.03), Rambus (RMBS, $5.63, up $0.15), Patriot Coal (PCX, $1.26, down $0.11), OCZ Technology Group (OCZ, $5.63, up $0.23), Pizza Inn (PZZI, $3.15, up $0.09), Bebe Stores (BEBE, $5.47, flat)  

 

= = = = = = = = = = = = = = = 

 

5.  Week Ahead

 

The week starts off with a regional report from the Chicago Fed at 8:30am (EST).  If the numbers come in worse than expected, it could start the domino effect.  At 10am, New Homes Sales are due out followed by the Texas Manufacturing Survey 30 minutes later.  After the bell, Apollo Group (APOL, $33.55, up $0.33) will announce earnings which could weigh on Education stocks as the $1 trillion student debt crisis starts to weigh on their books.  We can thank the government for creating this soon to burst bubble as many of the “students” paid rent and party on our dime.  This money will not be paid back.

 

Tuesday kicks off with the Weekly Chain Store Sales numbers which have been known to impact futures and the Case Shiller 20-City Home Price Index report, both before the opening bell.  At 10am, Consumer Confidence and the Richmond Fed Manufacturing Survey take center stage.

 

Wednesday’s action before the open includes the MBA Mortgage Applications figures at 7:30am, and Durable Goods an hour later.  Pending Home Sales and the weekly Crude Inventory picture will be released shortly after the start of trading (10am and 10:30am).

 

On Thursday, Initial and Continuing Claims could have a major impact on the markets, especially if claims creep closer towards 400,000.  Gross Domestic Product (GDP) figures will also be released and all aforementioned reports are due out at 8:30am.  The Kansas City Fed Manufacturing numbers are due out at 10am.

 

Friday wraps up with Personal Income and Personal Spending numbers (8:30am), Chicago ISM (9:45am), and Michigan Sentiment (9:55am).