Wednesday, October 29, 2008

The Kirk Report

The Kirk Report

Shorts On The Run

Posted: 29 Oct 2008 12:19 PM CDT

While everyone waits for the Fed to do their thing, there are some explosive short-squeeze situations out there today. Case in point - many of the gaming stocks which looked like they were headed to zero have reversed course in a truly spectacular fashion.

Las Vegas Sands

Remember, trend channels work both ways and there are a number of reversion to the mean setups (i.e. playing oversold counter-trend situations) if you have the courage and cash to trade them. Frankly, if the market is truly bottoming out, we should see many, many, many more of these kinds of setups.

October Winners (So Far)

Posted: 29 Oct 2008 11:43 AM CDT

There are a few stocks that are sporting significant gains into the final trading hours of October:

October Winners

Given recent volatility, it makes sense to lengthen the time frames a bit to see which stocks are leading over several weeks, not just a few days. Moreover, as you can see from the industry group representations - there are a lot of banking, financial services, drug, & transportation firms on this winner's list.

You can say what you want about the $700 billion dollar bailout, but it seems to be working wonders for some of these banking and financial service stocks.

Fed Day

Posted: 29 Oct 2008 08:15 AM CDT

Good morning. After one of the largest rallies in history, premarket futures have been extremely volatile and currently point to a mixed open. This morning we have continued strength in overseas markets, a surprisingly better than expected durable goods report, and more earnings news. In addition, the Libor continues to fall.

Premarket gainers: DENN, CSUN, ICOG, PMI, TSRA, ARA, HERO, SLW, CKSW, EZPW, FNM, PCC, WYNN, SI, FLS, APEI, RFMD, MTU, MF, SSRI, OC, SI, ICO, LEN, SVVS, LPHI, APOL, FRE, STV, ROST, DAI, HMC, & MGM.

Premarket losers: KMR, KB, VPRT, MTG, ODP, GLW, MOLX, EJ, UMC, SKS, DRIV, RAS, LFUS, SSCC, LCC, WBSN, AEG, Q, VSE, OCNF, AUO, CAL, ACH, & ONNN.

At 10:35 we have the EIA Petroleum Report and, of course, this afternoon the Fed decision at 2:15PM. For what it is worth, Fed funds futures currently show expectation for a 50 basis point cut although some believe we may see a 75 basis point cut instead. We shall soon see.

The first level of key overhead resistance will come around the 980 to 1000 level in the S&P and they'll need to take that and close them higher to confirm the merit of yesterday's super snapper. Have a fun Fed day!

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