4:45pm (EST)
1. Market Summary
2. Freeport-McMoRan Copper & Gold (FCX) Does Us a Favor
3. Can McDonald’s Hit Par ($100)?
4. Earnings
5. Weekly Wrap Portfolio Update
6. Week Ahead
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1. Market Summary
Last week we talked about how the bulls gave us solid hints they were going plow past Dow 12,000 and S&P 1,300 but what they failed to warn us about was Egypt. Charts can be a great tool and perhaps the BEST tool when starting your research. Why? Because no matter if you have heard of a company or not, all you have to do is look at a chart to find where support and resistance are at (S&R). You can do it in, um, about 5 seconds if you are just looking to see an uptrend or downtrend but when you look at S&R levels, it requires a lot more homework and thinking outside the box.
So many of the talking heads and money pros get so caught up in what the market is doing from day to day that they fail to even look at a chart because they are so worried about getting in or getting out on a stock that is hot or falling out of favor. The key to beating the crowd is to stay focused and realize that in TRENDS, 75% of stocks move with the market and the key is finding stocks that are showing momentum.
In a bull market, you want to buy call options on stocks in strong sectors showing strength. In a bear market you want to buy put options on weak stocks that are sinking and have broken business models. In a flat market you want to buy both calls and puts.
These are some of the tools we use to separate us from other option newsletters because we don’t follow the herd and we don’t spit into the wind. In other words, we don’t bet against a trend.
The market action last week was incredible as Egypt played Wall Street like a puppet with the on-again, off again resignation of its President. As of Friday, it was official again. Around 11am the bulls got word the baby was put to bed as Egypt’s President Hosni Mubarak officially stepped down. One sector playing wingman were the Financials which came back to life after the U.S. government said it would be exiting the mortgage business.
As a result, the Dow added 44 points, or 0.4%, on Friday and closed at 12,273 after hitting a high of 12,285 intraday. For the week, the index was up 181 points, or 1.5%, as the bulls got back on a 2-game winning streak. We mentioned the breakout over 12,000 could lead to a run to 12,300-12,350 and the bulls showed strength in holding this level after the breakout despite the geopolitical turmoil. Over the past 2 weeks the blue-chips are up 450 points, or 3.8%. Support is at 12,200 and further down at 12,000 and then 11,800.
The S&P 500 gained 7 points, or 0.6%, and settled at 1,329. For the week, the index was up 18 points, or 1.4%. The S&P traded to a high of 1,324.87 on Tuesday and 1324.54 on Wednesday and we said a break above 1,325 would be the next green light. We got that Friday as the index hit a high of 1,330 intraday. We said there could be fluff up to 1,350 and support is at 1,300 with the 1,275-1,270 level serving as backup. Beyond that there is additional support at 1,260-1,250. In other words, the bears have multiple layers to crack which will give us plenty of time to prepare for a bear market when it comes.
The Nasdaq popped 19 points, or 0.7%, to finish at 2,809. For the week, the index jumped 40 points, or 1.5%, and the break above 2,800 was another solid sign Tech remains strong. Over the past few weeks, the Nasdaq is up 123 points, or 4.6%. Our near-term target has been 2,850 with a possible push up to 3,000 while support is solid at 2,700 and then 2,650-2,600. After that would be 2,500 and signal a trend reversal.
As the bulls edge closer to our near-term targets (again) we are sure your next question is “what are our next targets?” Well, here were our thoughts on January 19, 2011 in our Daily newsletter:
“The Dow gained 50 points to close at 11,837 on Tuesday and made its first close above the 11,800 level since June, 2008. The index hit a high of 11,858 and our 12,000 target we have had in place since October is just over 1% away. We have mentioned we are expecting a slight pullback afterwards but we are going on record by saying the index could reach 13,000 by yearend. Of course, a lot has to go right but the chart is pointing towards 12,500 and then 13,000 for the Dow, longer-term.
The S&P 500 added 2 free throws and ended at 1,295. The index is within spitting distance of our 1,300 target and we mentioned a run to 1,325 could be possible on some fluff. Our weekend work revealed some nice targets for the S&P as well. If things go right in 2011, the index could see 1,450-1,500 by Christmas.
Tech struggled for much of the morning but battled back and stayed positive shortly after lunch. The index managed a 10 point pop when the dust settled and was last seen standing at 2,765. We mentioned our 3,000 target could be a stretch over the near-term but further signs are pointing towards a possible run to 3,400 over the next 12 months” (END)
As you can see, we have been in one of the easiest technical pictures we have seen in a long time and as we have outlined resistance all the way up since October. If and when the bears want to rumble we will use these numbers as support.
From our November 2, 2010 Morning Update:
“The Dow finished with a 6 point gain and closed at 11,124 but traded to a high of 11,244. We were hoping for a close above the 11,200 level which we have been talking about for a few weeks and then 11,258. If we get an intra-day high of the latter number or a close above either, then we should see Dow 11,500-11,600 by year-end, at least. These upper targets represent resistance from July 2008. We also think if the bulls can get through this week holding support (11,000-10,800) then the index has a shot at 12,000.
The S&P 500 added a free throw (1 point) and settled at 1,184 after touching 1,195. We are looking for a close above 1,200 and then 1,220 which should clear the way for a test of 1,300. The index will run into resistance at 1,250 but we expect it to be somewhere in this upper neighborhood by year-end. The S&P held the 1,175 level once again and any dips to 1,150 should be considered buying opportunities if these levels hold on weakness.
The Nasdaq failed to finish in the green and slipped nearly 3 points to end the day at 2,504. The index traded to a high of 2,532 which was just short its 52-week high of 2,535. We said in our Weekly Wrap the index was the first to confirm a new bull TREND and we will talk about this in a minute. We already have 2,600-2,700 in our sites for Tech but a run to 3,000 could be in the cards for 2011 if support holds.” (END)
We try to make the technical picture easy to read and once you have that down you are good to go on following the market and controlling your emotions.
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2. Freeport-McMoRan Copper & Gold (FCX) Does Us a Favor
The stock of Freeport-McMoRan Copper & Gold (FCX, $53.52, down $0.10), the largest copper and gold miner in North America, rises mainly with the price of copper, not gold, since copper provides a large chunk of their revenue, about 70%. Taking advantage of the commodities boom, the company plans to spend additional capital to increase output from its mines. This should boost its earnings, as copper prices stay high. Global diversification, strong earnings, and a bullish technical picture should cause prices to head higher. Shares recently split 2-for1 a few weeks ago which cut shares from over$100 to the $50’s. This also made the options “cheaper” to play.
We normally shy away from playing options on stocks over $100 because the option premiums are more expensive than stocks that trade in double digits, to a degree. We have recommended options trades in the past on stocks over $100 but Freeport’s split makes it a little easier to play the moves down at these levels. As a result, we want to take a closer look at the company to see if there is an option trade down the road.
Map of Operations:
– The Grasberg project (Papua New Guinea) contains the largest recoverable reserves of copper and the largest single gold reserves in the world. It also mines silver. Freeport owns 90% of the project.
– Tenke Fungurume (Democratic Republic of the Congo) mines copper and cobalt and is expected to produce 250 million pounds of copper and 18 million pounds of cobalt per year. At today’s price of copper at $4.53/ounce ($72.48/lb) and cobalt at $20.25/pound, that is $18 billion of copper and $365 million of cobalt a year. Freeport owns a little over 55% of the project.
Here is a look at the company’s recoverable proven and probable reserves which totaled 104 billion pounds of copper, 37 million ounces of gold, 2.6 billion pounds of molybdenum, 270 million ounces of silver, and nearly a billion pounds of cobalt.
Breakdown of reserves and sales as of December 31, 2009:
Freeport-McMoRan Copper & Gold reported earnings back in January and said fourth quarter consolidated sales totaled 941 million pounds of copper, 590 thousand ounces of gold and 17 million pounds of molybdenum, compared to 989 million pounds of copper, 551 thousand ounces of gold and 16 million pounds of molybdenum versus 4Q09. In other words, sales of copper declined by 48 million pounds, gold increased by 39 million ounces while sales of molybdenum increased by 1 million pounds if you break it down further.
Consolidated sales for the year 2010 totaled 3.9 billion pounds of copper, 1.9 million ounces of gold and 67 million pounds of molybdenum, compared to 4.1 billion pounds of copper, 2.6 million ounces of gold and 58 million pounds of molybdenum for the year 2009. A breakdown would be that sales of copper declined by 1.1 billion pounds, sales of gold declined by 700,000 ounces while sales of molybdenum increased by 9 million pounds.
Going forward, the company forecasts consolidated sales for 2011 to be approximately 3.85 billion pounds of copper, 1.4 million ounces of gold and 70 million pounds of molybdenum.
For the first quarter of 2011, Freeport expects sales to be approximately 840 million pounds of copper, 325 thousand ounces of gold and 17 million pounds of molybdenum. At today’s price of copper ($72.48/lb), gold ($1,360/ounce), and molybdenum ($17.96), this represents sales of over $60 billion for copper, $442 million for gold, and $300 million for molybdenum, which puts total sales at $60+ billion.
The chart below shows the company’s earnings history. Earnings per share are non-GAAP.
|
Revenue – Quarterly Results (in $Billions) |
Earnings Per Share – Quarterly Results |
||||||
|
|
2010 |
2009 |
2008 |
|
2010 |
2009 |
2008 |
|
1st Qrt |
4.363 |
2.602 |
5.672 |
1st Qrt |
$1.03 |
$0.05 |
$1.46 |
|
2nd Qrt |
3.864 |
3.684 |
5.441 |
2nd Qrt |
$0.75 |
$0.71 |
$1.23 |
|
3rd Qrt |
5.152 |
4.144 |
4.616 |
3rd Qrt |
$1.25 |
$1.11 |
$0.68 |
|
4th Qrt |
5.603 |
4.610 |
2.067 |
4th Qrt |
$1.63 |
$1.13 |
-$18.38 |
As long as copper, gold, and molybdenum prices don’t plunge, the company seems on track to meet earnings and revenue estimates of $1.23 and $5.38 billion when it reports in April.
Now some chart work:
The MFI (Money Flow Index) is below 50, meaning shares are neither overbought (MFI of 80) nor oversold (MFI of 20), giving it room to go up. Money flowing into a stock (positive money flow) and money flowing out of the stock (negative money flow) has not changed much in the past month.
A rising RSI (Relative Strength Index) shows a bounce off the oversold border (RSI of 30) which is also bullish. A downward price movement means that the downtrend may be weak but there is more volume associated with price advance than with the price decline, thus giving the stock a bullish buy signal.
The stochastic %K and %D graphs gave a bullish signal on at the beginning of February when the %K crossed above the %D in oversold territory (reading below 20). Since then, both have risen above 20 but have recently reversed course and may test the oversold territory again.
In the graphs, three previous examples are given to show how these technical’s correlate with price. The first example (orange line) in late April shows a bearish cross of the %K crossing below the %D in overbought territory, which is defined as reading above 80. This correlated with an overbought W%R and thus a fall in the price. The second and third examples (purple lines) around September 10 and February 1 shows a bullish cross as noted above, and oversold RSI, and an oversold W%R (reading above 20), thus corresponding with a rise in price. Additionally, the W%R appears heading back to oversold territory, coinciding with the other indicators, which seem to be flashing the same buy signals.
Using the slope of 33 cents/day from its last fall, it is possible it will rise by $10 to a share price of $65 over the next month. To be on the safe side, especially since first quarter production is lower than fourth quarter production, let’s use the 16 cents/day slope from the last uptrend to give it a 60-day time frame.
We like covered call on this stock but to write one covered call trade would cost you over $5,000 so it may be better to speculate on Freeport going higher over the next few months than buying 100 shares of the stock and selling a call option.
If we just assume shares are going to move up to $60 over the next two months we could use the April call options as a possible trade but they won’t list until next week. Specifically, we could also look at the March 60 calls (FCX110319C00060000, $0.75, down $0.05) which expire in 33 days or the May 60 calls (FCX110521C00060000, $2.00, down $0.10) which have 96 days and give us an additional 30 days for our plan to come together.
In either case, if shares are at $65 by mid-March or mid-May, the options would be worth $5. The March calls would return 565% while the May options would return 150%. While the first “option” might be to go with the March calls because of the possible return, the May calls are the “safer” bet. You could also wait until next week for the April options to list (which is what we may do for our Daily newsletter) but as you can see, call options open a new door on trying to double your money playing options on Freeport instead of buying the stock in the $50’s and waiting for it to go to $100 again.
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3. Can McDonald’s Hit Par ($100)?
Although we don’t spend a lot of time at McDonald’s (MCD, $76.14, up $0.38), we do admire the company for its products, strong brand name, great franchise business, and its dominance of the fast-food business. We also like their deal with Chinese oil giant Sinopec (SNP, $105.60, up $1.09) to open stores throughout China. All these are a plus and McDonald’s will very, very likely hit par ($100) at some point in the future but the question is, how long?
With a current price of $76, MCD will need to rise by $24, or 35% to make it to $100. It would also represent an increase of $25 billion in market cap.
The other thing that could halt the stock’s path for triple-digits is the rising oil and food costs that are likely to increase over the next few months and years. We recently read where the U.S. Grains Council forecasts China’s imports of corn are set to explode sevenfold in just a year, from 1.3 million metric tons in 2010-11 to 9 million in 2011-12. These figures could put a damper on already rising food costs but the company has faced this challenge before, and it will probably weather the storm again.
The next earnings report for the company isn’t due out until mid-April and estimates are for $1.09 a share on revenue of $5.95 billion. The chart below shows their earnings history. Earnings per share are non-GAAP.
|
Revenue – Quarterly Results (in $Billions) |
Earnings Per Share – Quarterly Results |
||||||
|
|
2010 |
2009 |
2008 |
|
2010 |
2009 |
2008 |
|
1st Qrt |
5.610 |
5.077 |
5.615 |
1st Qrt |
$1.03 |
$0.83 |
$0.81 |
|
2nd Qrt |
5.946 |
5.647 |
6.075 |
2nd Qrt |
$1.13 |
$0.98 |
$0.94 |
|
3rd Qrt |
6.305 |
6.047 |
6.267 |
3rd Qrt |
$1.29 |
$1.15 |
$1.05 |
|
4th Qrt |
6.214 |
5.973 |
5.565 |
4th Qrt |
$1.16 |
$1.11 |
$0.87 |
By our calculations, it will be close as far as the company matching or even beating current expectations, however, anything is possible with their rapid expansion into the Asia and China markets will be the wild cards.
The chart is also giving mixed signals and shows the super-strong resistance at $80.
The MFI (Money Flow Index) and the RSI (Relative Strength Index) give bullish signals, but the stochastic %K, the %D graphs and the W%R graph are near or over overbought territory, and represent a bearish signal.
Moreover, if the stock does go up, its rise is only 8 cents a day, making $100 about 300 days away, assuming linear assent for those entire 300 days. Although $80 is a huge roadblock, there could be a rally up to this level given the current momentum and a recent report that global sales were up.
As a covered call, the stock would be expensive to add to our Weekly Wrap portfolio but we did recommend call options on McDonald’s back in September 2010 that returned 136% for our subscribers in a little over a month. Shares were at $75 when we profiled the trade and the December 80 call options were at 53 cents. A month later on October 21, 2010 the stock hit an intraday high of $79.48 and we suggested selling the options for $1.25 because we didn’t see the momentum to crack $80.
Shares struggled with the $80 level for another month and could not penetrate this level until December 7, 2010. Over the next month and into January 2011, shares fell back down to the $75 level and reached a low of $73.55 before their recent bounce.
There is a chance the March 80 calls (MCD110319C00080000, $0.16, down $0.01) could double or even TRIPLE from current levels if the stock makes a run at $80 over the next 5 weeks and we will be following these options in our Daily newsletter.
We certainly won’t be buying the stock anytime soon but we may be getting a “golden” arches opportunity to pick up some cheap out-of-the-money calls on McDonald’s that could get us “lovin’ it” (our investment) over the next month.
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4. 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. The first set of companies report before the bell that day, the second set after the market closes. (Quotes are as of Friday’s close, 2/11/11).
MONDAY
Administaff (ASF, $29.67, up $0.13), Diebold (DBD, $38.20, up $ 0.13), Fortune Industries (FFI, $0.70, down $0.02), Tower Semiconductor (TSEM, $1.41, up $0.04), Valspar (VAL, $38.42, up $0.15).
Advanced Energy Industries (AEIS, $15.34, up $0.04), Arch Capital Group (ACGL, $92.26, up $1.15), Impac Mortgage Holdings (IMH, $2.80, flat), Limelight Networks (LLNW, $6.00, up $0.04), Marriot International (MAR, $41.22, up $1.22), Resolute Energy Partners (REN, $17.95, up $0.14), Solar Power (SOPW, $0.42, down $0.05), Winn-Dixie Stores (WINN, $6.99, up $0.11).
TUESDAY
American Water Works (AWK, $26.62, up $0.16), Fossil (FOSL, $82.79, up $2.34), Marsh & McLennan Companies (MMC, $28.80, up $0.31), Omnicom Group (OMC, $49.43, up $0.50), Red Lion Hotels (RLH, $7.86, down $0.04), Sirus Satellite Radio (SIRI, $1.84, up $0.07), Vishay Precision Group (VPG, $19.90, down $0.27), Watson Pharmaceuticals (WPI, $57.16, up $0.70), Zebra Technologies (ZBRA, $41.18, up $0.23).
Analog Devices (ADI, $40.59, up $0.60), Bob Evans Farms (BOBE, $33.44, up $0.26), CNET Networks (CNET, $3.77, down $0.15), Dell (DELL, $13.97, up $0.12), j2Global Communications (JCOM, $ 29.00, up $0.19), La-Z-Boy (LZB, $8.27, up $0.11), Pan American Silver (PAAS, $34.00, down $0.49), Radiant Systems (RADS, $19.25, up $0.44), Tesla Motors (TSLA, $23.25, up $0.04), ValueClick (VCLK, $14.37, up $0.03).
WEDNESDAY
Abercrombie & Fitch (ANF, $54.89, up $1.86), Deere & Co. (DE, $95.42, up $0.90), Devon Energy (DVN, $86.44, down $0.44), FirstEnergy FE, $39.74, down $0.56), Health Care REIT (HCN, $49.39, down $0.01), LoJack (LOJN, $6.60, down $0.05), Martha Stewart Living Omnimedi (MSO, $3.93, up $0.11), OfficeMax (OMX, $17.00, up $0.37), Orbitz Worldwide (OWW, $4.26, down $0.55), Penske Automotive Group (PAG, $19.45, up $0.42), PF Chang’s China Bistro (PFCB, $48.32, up $0.57).
Advanced America Cash Advance C (AEA, $6.15, up $0.03), Agnico-Eagle Mines (AEM, $72.16, down $0.74), CBS (CBS, $21.94, up $0.32), Cleveland Cliffs (CLF, $87.51, down $0.83), Express Scripts (ESRX, $58.27, up $0.78), NVIDIA (NVDA, $23.47, up $ 0.65), O’Reilly Automotive (ORLY, $57.63, up $0.24), Peet’s Coffee and Tea (PEET, $41.92, up $0.85), Rubicon Technology (RBCN, $19.88, down $0.66), Sketchers U.S.A. (SKX, $22.42, down $0.30), Synopsys (SNPS, $28.78, down $0.01).
THURSDAY
3-D Systems (TDSC, $34.15, up $0.61), AngloGold Ashanti Ltd. (AU, $44.78, up $0.05), Apache (APA, $119.73, up $1.98), Barrick Gold (ABX, $47.49, down $0.23), Build –A-Bear Workshop (BBW, $8.28, up $0.31), Dr. Pepper Snapple Group (DPS, $33.96, flat), Duke Energy (DUK, $17.84, down $0.02), Hormel Foods (HRL, $51.30, up $0.43), J.M. Smucker (SJM, $62.73, up $0.21), K-Swiss (KSWS, $11.53, up $0.48), Playboy Enterprises (PLA, $6.14, up $0.01), Pride International (PDE, $40.08, down $0.24), Reliance Steel & Aluminum (RS, $54.87, down $0.55), Sears Holdings (SHLD, $91.20, up $2.74), Timberland (TBL, $28.91, up $0.26), Toro (TTC, $62.65, up $0.15), Virgin Media (VMED, $27.42, up $0.83), Waste Management (WM, $38.04, down $0.10), Weight Watchers International (WTW, $43.96, up $1.11),
Aruba Networks (ARUN, $26.07, up $0.52), Blue Coat Systems (BCSI, $31.07, up $0.80), (Bluefly (BFLY, $3.20, down $0.05), Brocade Communications Systems (BRCD, $5.88, up $0.06), Bucyrus International (BUCY, $90.72, down $ 0.12), CF Industries Holdings (CF, $150.34, down $0.03), First Solar (FSLR, $166.11, up $8.64), Intuit (INTU, $50.62, up $0.08), KKR Financial Holdings LLC (KFN, $10.55, up $0.03) Nordstrom (JWN, $46.15, up $0.58), Red Robin Gourmet Burgers (RRGB, $21.23, down $0.01), Shoe Carnival (SCVL, $25.88, up $ 0.56), Sunpower (SPWRA, $16.04, up $0.71)
FRIDAY
Barnes Group (B, $20.90, up $0.18), Calpine (CPN, $14.14, down $0.09), Campbell Soup (CPB, $34.43, up $0.14), Gold Field Ltd. (GFI, $15.84, down $0.14), Newcastle Investment (NCT, $7.22, up $0.15), Ruths Chris Steak House (RUTH, $5.01, up $0.15), Yingli Green energy Holding (YGE, $12.14, up $0.48). No companies worth mentioning are reporting after the close on Friday.
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5. Weekly Wrap Portfolio Update (Closing prices as of 2/11/11)
Spreadtrum Communications (SPRD, $23.21, up $0.30)
March 24 call (SPRD110319C00024000, $1.40, up $0.10)
Entry Price: $23.45 (2/7/11) sold March 24 calls @ $0.95
Exit Target: $30
Return: 6%
Stop Target: None
Action: Shares opened at $23.43 on 2/7/11 and the calls could have been sold for 95 cents. This lowered the cost basis to $22.48. As you can see, it would have been a great trade for our Daily newsletter as the options are up over 50%. However, the Weekly Wrap is all about safety which is why we covered this trade.
DryShips (DRYS, $5.04, up $0.01)
January 2012 7.50 call (DRYS120121C00007500, $0.38, flat)
Entry Price: $5.25 (1/03/11) sold January 2012 7.50 call @ $0.65
Exit Target: $8
Return: 10%
Stop Target: None
Action: DryShips opened at $5.37 on 1/3/11 and shares were at $5.25 shortly after the bell. The options opened at 69 cents so you should have gotten 65-70 cents for selling them. This lowered the cost basis to $4.60.
If shares are over $7.50 a year from now, you would be “called away” and the trade would make nearly 70%. We like the risk/reward factor these options offer.
Seattle Genetics (SGEN, $15.39, down $0.04)
March 17.50 calls (SGEN110319C00017500, $0.20, flat)
Entry Price: $15.50 (12/27/10) sold March 17.50 calls @ $0.90
Exit Target: $20
Return: 7%
Stop Target: None
Action: Seattle Genetics opened at $15.80 and shares were at $15.50 at 10am on 12/27/10. The March 17.50 call option could have been sold for 90 cents. This lowered the cost basis to $14.60. We like this company a lot going forward and their pipeline. Continue to hold.
Dendreon (DNDN, $35.15, down $0.05) (COVERED CALL)
February 39 call (DNDN110219C00039000, $0.04, flat)
Entry Price: $41.96 (9/13/10) sold October 45 call @ $1.30, (11/11/10) sold December call @$1.75, (12/20/10) sold February 39 call @ $1.50
Exit Target: $45
Return: -5%
Stop Target: None
Action: These February options expire Friday and we will be looking to sell a March or April option. However, we may wait for shares to test $37-$38 again before selling another call.
Dendreon opened at $41.96 and you could have sold the October 45 call option for $1.30 on 9/13/10. This lowered the cost basis to $40.66.
On 11/11/10 we sold the December 40 call option for $1.75 which lowered our cost basis to $38.91.
On 12/20/10 we sold the February 39 call option for $1.50 which lowered our cost basis to $37.41.
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6. Week Ahead
On Monday and Friday there isn’t anything on the economic calendar but there is a lot in between.
Before the bell on Tuesday, we get a look at Retail Sales which is a market mover as well as Import and Export Prices. Additionally, the Empire Manufacturing numbers are due out. During the session, Wall Street gets briefed on Business Inventories as well as the numbers for the NAHB Housing Market Index.
On Wednesday, the MBA Mortgage Purchase Index is due out first then Housing Starts and Building Permits. Also before the bell, the market will get a fresh look at the Producer Price Index (PPI) and Core PPI. After the opening bell, we get the weekly Crude Inventories figures, but more importantly, the Fed Minutes will hit later in the day.
For Thursday, the Consumer Price Index (CPI) and Core CPI results will be announced while the Labor Department provides the latest jobless claims and Continuing Claims numbers. Shortly after the opening bell, the market will digest the Leading Indicators which doesn’t carry much impact, normally, and is a review of stuff we have already heard. However, the Philly Fed figures could have a slight impact on market direction.
As we move towards the next stage of this bull market, the only thing we aren’t 100% sure of are the time frames we could hit our 2011 price targets for the indexes. This of course always depends on what is happening around the world. Until next week…
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