Wednesday, January 10, 2007

Looking For Signs of Strength

The market is opening under selling pressure. Oil is down again, testing the $55 level, and this is weighing on the energy complex. Emerging market stocks are also down again, and this is likely spilling over onto our markets.

The declines in oil, commodities, and emerging markets since the beginning of the year have been sharp, which often happens after a trend gets too extended. I suspect we will see a rally in those markets at some point, as they are now getting oversold.

The U.S. trade deficit narrowed in November to $58.2 billion ($59.5 billion consensus), its lowest reading since July 2005.

The SPX and COMP are now testing their respective 50-day moving averages. It's too early to say if a breach will lead to a more prolonged correction, but these are key levels that bear watching.

In other news and notes:
  • Lots of upgrades and tgt price raises for AAPL
  • Asian markets fall in overnight trading; Europe also
  • KMX profiled in IBD's New America
  • GTRC lowers Q4 guidance
  • CIBC says FORM is top idea for 2007
  • CPKI guides Q4 above consensus
  • Amtech starts PSPT with Buy ($30 tgt)
  • IMCL +7% on Erbitux news
  • USNA +6% on raised Q4 guidance
  • JCOM -12% on lowered guidance

long AAPL


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