Morning Market Thoughts
Good morning. We’re looking at a flat open as traders wait for earnings numbers from:Monday: $HAL, $APC, $ARNC, $HAS, and $GOOGL
Tuesday: $MCD, $GM, $AMGN, $CMG, $CAT, $T
Wednesday: $FB, $F, $WFM, $KO, $BA
Thursday: $UPS, $CMCSA $MA, $TWTR, $VZ and $AMZN
Friday: $CVX, $XOM$ AAL $ABBV $MRK, $WFT, $BCS, $GT. $WU, $COL and $YNDX
So it’s going to be a very busy week. Go into it with a plan. What are you going to do. Anything that you’re interested in? Is there any specific stock you are focused on? Are you holding it over earnings, despite the risk of an unpredictable adverse move? There is no right answer to these questions. They are just questions you should ask yourself. If you don’t have a plan, then you are left to your own devices when something starts happening. At that point, frankly, you can do anything you want — there is no plan to deviate from. You’re just shooting from the hip and hoping for the best. In my experience, shooting from the hip can often lead to getting shot in the foot.
I’ve noted how I would never short Blue Apron ($APRN) despite being of the mind that Blue Apron (APRN) has nothing really proprietary in it’s business model; rather, it is just first in the space. Well, this morning the stock is up about 10% on a few upgrades by various analysts. Even though it might seem like they got together and “colluded” (big word these days) to hike the price, the real reason for the timing is because underwriters can now start issuing research on the company. There is a short restriction time for underwriters when a company goes public. So now that they can start issuing research, they’re going to start justifying the reason to buy the stock. Goldman issued a buy rating, with an $11 price target. RBC has an outperform rating with a $10 target, and Oppenheimer has an $11 target on this stock. Interesting that the IPO price was $10, yet none of these influential firms could generate enough wishful thinking to even give the stock a boost much above its IPO price.
If you were short, you’re in pain. This is a great example of the underlying bid in stocks that are selling off. At some point, someone steps in and provides a catalyst for a reversal. Boom! The stock takes off. No such luck with Snapchat…but I’ve got the same approach. Not swimming in that pool.
I’ll see you in the forum in a while.
–Dan
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