“This week will be headline driven and there will be plenty to digest with the Black Friday numbers and the rhetoric from the political stage here at home and overseas.
Black Friday figures will be strong and many retailers should post nice sales results as nearly 250 million shoppers hit the stores and the Internet. The 4-day weekend saw a 9% pop in spenders with the bill coming in at $425 compared to 226 million shoppers in 2011 that spent just under $400 over the same time period. This could be bullish for Cyber Monday and will only add to the impressive numbers but the surge in shoppers and spending could mean the rest of the holiday shopping season will be a disappointment.
Then again, if the zombies can agree on spending cuts and tax hikes to avoid the Fiscal Cliff, all should be well for a continued rally. The problem betting on politicians to “agree” on anything in a timely fashion will be the hard part but they do have a deadline. There are only 5 weeks before there will be some kind of handshake because we are nearly 100% certain the zombies aren’t dumb enough to push America into another recession.
If we chop off the last week of the year then it leaves 4 weeks to solve the problem. We would expect Congress to take their usual Christmas and New Year’s vacations so we are expecting a deal by December 21. If the headlines out of Washington are positive to start the week and there is no muscle flexing, finger pointing, or sideshow shenanigans the bulls could be on their way to a double-digit rally to end the year.
Greece will be back in focus after European leaders failed to come up with longer-term budget solutions so the country could get its next bailout payment. Talks are expected to resume today and the overseas zombies are in a race with the ones here at home to see who can kick the can further into 2013 then deal with any REAL solutions.
Economic news will take a backseat to the battle of the zombies but there are some important ones to watch that could impact trading. Tuesday’s Durable Goods and the Richmond Fed Manufacturing numbers will be watched along with the Fed Beige Book on Wednesday and the Chicago PMI figures on Friday.
As far as earnings plays, there may be some call and put option players betting on the direction of ADT, AEO, BKS, GES, GMCR, KR, TIF and TIVO. We will profile a few of these trades on our Watch List this week for possible action and our top 2 are GMCR and TIVO.
(from 11/19/2012 Monday Morning Daily Outlook)…
The bulls went into last week with a full head of steam following the 4% pop during the Thanksgiving holiday but got off to a slow start. Although support held on Monday and was stretched on Tuesday by the bears, the market still looked poised to move higher.
The action picked up on Wednesday and Thursday despite the Fiscal Cliff jargon as the red zombies battled the blue zombies on sticking points to reach an agreement. The head red zombie declared a stalemate on Friday while the head blue zombie was off in Pennsylvania throwing blame back on the reds for not get a deal done.
We try to ignore the rhetoric and we have to report it but we are still amazed America (and the market) is held hostage by the political antics of the knuckleheads who run our country. Unfortunately, the circus in DC will continue for a few weeks and with earnings winding down, and Europe on the backburner, the Zombie Show is the main flick Wall Street is watching.
Side Notes: GMCR zoomed 25% after announcing earnings.
TIVO was pushing $12 by week’s end.
As far as the market…
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