Monday, April 20, 2009

The Kirk Report

The Kirk Report

Monday Mailbag

Posted: 20 Apr 2009 12:02 PM PDT

Thank you for sending in your questions. Topics I will cover today include:

  • Hybrid Strategies Work Better

  • Missed Trades Being Too Conservative

  • An Investment Play On Cuba

  • Market Sentiment Tells

  • Legging Into Trades

  • Understanding How You Learn

  • IBD's New America Company Profiles

  • A Stock Screen Comparison Tool

  • Opinion Making In The Financials

  • Daily Stocks To Watch

  • Preconditioned to Fade Strength & Buy Weakness

  • Fundamental Analysis of ETFs

  • Screening For Enterprise Value

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A Big Week For Earnings

Posted: 20 Apr 2009 06:02 AM PDT

Good morning. Premarket futures indicate significant sell interest at the open following weakness in overseas markets.

In addition to earnings reports from Bank Of America (BAC), Eli Lilly (LLY), & Eaton (ETN) and others, Oracle (ORCL) will pay $9.50 per share to acquire Sun Microsystems (JAVA) and GlaxoSmithKline (GSK) agrees to buy Stiefel Laboratories for up to $3.6 billion.

After shutting down more banks over the weekend, in a significant shift, the White House and Treasury officials now say they can stretch what is left of the $700 billion financial bailout fund further simply by converting the government's existing loans to the nation's 19 biggest banks into common stock.

Over the weekend, comments from both Volcker and Geithner drew attention especially since the government decided to provide AIG with another $30 billion dollars. Finally, bankruptcy concerns surrounding General Motors continues to linger.

Premarket gainers: JAVA, PBG, PAS, RFMD, QTM, WRES, SKS, APWR, ALTH, PALM,DNDN, NTAP, HMY, LLY, FNET, LVS, PBGT, LZ, SIRI, & HMY.

Premarket losers: DSCO, MMR, KWK, LAMR, CNO, BBEP, AAUK, ERIC, EGLE, LOGI, ASML, MT, NVDA, GDP, DB, TI, FCEL, ORCL, DRYS, GMX, ING, AXA, BCS, RTP, DB, PUK, HBC, AAUK, BBL, & CSE.

There isn't much economic data due out today - only the leading economic indicators for March at 10:AM. This will be a big week for earnings reports. This evening both International Business Machines (IBM) & Texas Instruments (TXN) will report after the closing bell.

Much like last week, the sentiment sell indicators and overbought conditions we've been tracking remain fully intact but without any price action to confirm that the rally is going to roll over at these levels. As a first step, we simply need to violate and close below last Friday's lows around S&P 860 and after that last week's lows around S&P 835. On the upside, overhead resistance toward S&P 900 will remain difficult to chew through although this market continues to show strength unlike anything we've seen in some time.

Let's make it a great week!

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