Friday, February 13, 2009

The Kirk Report

The Kirk Report

High Expectations = Disappointment

Posted: 13 Feb 2009 03:53 PM CST

The market posted its sixth loss in five weeks and its worst weekly showing since November as high expectations for government stimulus and bank bailouts turned to widespread disappointment.

S&P 500: This Week

Since last Friday's close, the S&P 500 declined -4.81%, Dow -5.20%, Nasdaq -3.60%, and the Russell 2000 -4.75%.

To win big this week you needed to be "ultra short" almost everything, but especially real estate (SRS), financials (SKF), utilities (SDP), oil & gas (DUG), and small caps (SJH). While you're at it, it would have also been helpful to be short Japan (EWV) and China (FXP) but long Russia (RSX).

Next week is another 4-day trading week along with February options expiration and you know how I feel about those (i.e. they tend to be the most challenging). So rest up, have a great Valentine's Day tomorrow, and I'll see you on Tuesday morning. Enjoy the weekend my friends!

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Posted: 13 Feb 2009 10:53 AM CST

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Chasing The Carrot

Posted: 13 Feb 2009 07:55 AM CST

Chasing The Carrot

Good morning. Premarket futures have been volatile and currently point to a slight negative open.

There is little in the way of market-moving data this morning, which leaves market participants to focus on yesterday's final hour reversal and word that help may be coming for troubled mortgages. Timothy Geithner apparently intends to make the mortgage plan public next week, once again providing the market with a carrot to keep hope alive this holiday weekend.

In other news, banks may require more aid to keep solvent and euro-zone GDP contracted 1.5%, which is the most on record and even weaker than the market consensus estimate.

Premarket gainers: MELA, RACK, CSTR, VCLK, CTSH, SIGM, GDI, RAH, MHO, FRE, ISIL, ALXN, MPEL, AAI, YRCW, ANF, MFE, DFT, JASO, RBS, HBC, SIRF, PALM, & PEP.

Premarket losers: SVNT, CAKE, AMKR, GERN, STEM, AYR, JAH, NTGR, LPHI, TDS, FST, WFC, PC, CAL, CENT, JAVA, COGO, QGEN, GOLD, WFC, EGLE, FITB, & COCO.

Ahead of a three-day weekend, the only report due out is one on consumer sentiment at 9:55AM. Markets will also be looking to see if Congress approves the $789 billion stimulus package as well as a meeting in Rome of Group of Seven industrialized nations of finance ministers and central bankers.

We should expect to see volume slow down a lot this afternoon as traders close up shop early (my plan as well). For what it is worth, the trading session on Friday before President's Day has been weak in recent years but with this headline-driven environment, anything is game for today. Have a good one!

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