Wednesday, April Fools Day brings us no earnings before or after market. Construction Spending for February at 10ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/const.htm Prior reading was a negative (3.3%), consensus now calls for an improvement of negative (1.6% - 2.0%). Briefing.com gives this report a letter "D" in terms of market moving significance, so even with that forecast improvement, we do not see any effect on the markets. The Institute for Supply Management Index (ISM) for March at 10ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/napm.htm Here's an economic report that judges the sentiment of the managers of 18 manufacturing sectors. The poll asks for a thumbs up or down on the current state of business. Since it doesn't take size of firms into account, it lacks some credibility, yet it is given a letter grade of "A-" for market moving impact. With so many stimulus greenbacks about to be thrown around, we anticipate a sudden shock in positive sentiment soon. The positive sentiment will be scattered, yet it could lift other sectors in sympathy, so to speak. The change in sentiment will be a false signal as far as we're concerned because it will be triggered by inorganic type growth. Bigger governments have a tendency to smooth and sway sentiment and even employment figures as they throw money around, so be careful. We envision this ISM to begin reflecting a tiny bit of that positive sentiment, and then it'll continue for several quarters. The $64,000 question is whether the market will be fooled on this April 1st into buying a $10+ Trillion bigger government mentality or not: not us. Here's how we see it without getting too preachy: IF the ISM comes in above its 6 month average of 38.4 or higher, the market will explode up. IF the ISM posts below 35, the market will implode lower. Anything in between will only bring on contagious yawns. Don't get fooled today though! POTC predicts Thursday will bring the bear market rally back, so we recommend buying Wednesday afternoon IF the Dow dips 150+ points and either selling into Thursday's morning - midday rally, or swinging short Thursday afternoon, as we see Friday offering up a yet another reversal down.
Thursday, April 2nd brings us Initial Claims for Unemployment for week ending 3/28 at 8:30ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/claims.htm POTC believes this report will give a false signal that things are improving. As pessimistic as we are, the market will probably rally hard Thursday. Prior weekly unemployed rang in at 651K, now the consensus is 645K - 653K. Although we will not position short ahead of this report, we will cheer IF the market rallies, and here's why. Friday's mother of all economic hammers brings us the fatter butter, the monthly employment percentage. And IF they rally this bear market higher Thursday because weekly statistics have improved by a few thousand, that will offer forward-thinkers/contrarians a fantastic opportunity to buy puts. We do not see the market closing on its highs, so prepare to execute short positions into the late morning/early afternoon buying frenzy, because smart hedge fund money will be selling into the bell. Before market earnings from Monsanto Company (MON), Q2 '09, revenue/sales estimates at $4.14B, last year same quarter revenue was $3.78B. Earnings per share estimates at $2.07, last year same quarter eps was $1.79. The shares have rallied in this angry bear growl of late and closed above their 200 day moving line of $82. You decide how to execute or not execute trade set-ups here; we're punting. After market earnings from: Global Payments Inc (GPN), Q3 '09, revenue estimates of $377M, last year same quarter revenue was $311M, a very nice improvement in any environment. Perhaps the credit card and casino processing businesses have not died? This is a very tough one to call. Earnings per share estimate is for $.42, last year was $.44, and here's where the truth is revealed. Rising sales due to GPN's account wins/scale, yet shrinking net profit margins. IF we had to toss the bones here, we'd be shorting or buying puts ahead of the report: GPN should revisit the sub $30 level before $40 in our opinion. Research in Motion (RIMM), Q4 '09, revenue estimate is for $3.4B, last year same quarter was $1.88B... very nice. Bottom line is pegged at $.84, compared to last year of $.72, and that we feel will be beat. POTC is biased toward RIMM. We believe the shares have been unfairly valued due to the Apple (AAPL) iPhone pricing model and carrier relationship advantages. Although Apple is arguably a top three technology company in the world, RIMM is not far behind. POTC does not believe RIMM will offer a doom & gloom business scenario, just the contrary. We sense RIMM has won a great deal of teen business in recent months and there's always a chance of a paradigm shift type business partnership/development. POTC, like the current change President, likes RIMM, GOOG, and AAPL, we recommend buying these Generals on any weakness.
Friday, April 3rd brings us the Unemployment rate for March: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/employ.htm This is referred to as the release that wields the heaviest hammer to market direction. The employment rate is arguably the best economic indicator we have in addition to Gross Domestic Product (GDP) to gauge future growth or contraction. Even though it's backward looking, the percentage affects business, consumer, and government psychology. We sure hope it affects this budget that's pending that's built to destroy the principles of capitalism. Capitalism was NOT built on the shoulders of bigger government, but a let me live free and give me the ability to spend my own capital philosophy. Prior unemployment for February was 8.1%, now consensus is for 8.5%. Will anyone be fooled into believing things are improving when Obama is dipping his sticky fingers into just about every sector? What does free market mean to him anyway? Is it possible ignorant fools continue to bid this market higher, of course, bear markets have a way of gutting geniuses and idiots alike. Yet we will definitely be shocked IF the market rallies higher on what looks like a very high estimate of 8.5%. POTC predicts the market implodes 500+ Dow IF the rate comes in 8.4% or higher. IF it comes in below 8.3%, then they'll rally the bear higher. The Institute for Supply Management Services Index (ISM) for March comes at 10ET: http://www.briefing.com/Investor/Public/Calendars/EconomicReleases/napmserv.htm Prior was 41.6, consensus now is 42 - 43. The trend will only be exacerbated by this number, as it's current reading is at such depths. Smart traders got long late Wednesday and reaped the Thursday rally. Smarter traders swung short mid to late afternoon Thursday and stayed short through the weekend. IF this little weekend piece helped you change something for the better, please share our subscriber email with anyone you feel would appreciate it: Psychologyofthecall@gmail.com. The Psychology of the Call team wishes all forward-thinkers a happy & healthy April. As the saying goes, "Spring has Sprung and Love is in the Air, It's Everywhere": http://www.youtube.com/watch?v=hvTwFl6OIAk&feature=channel