Today looks to be a rather boring day, if the futures indicate what will happen. Early this morning futures rebounded nicely; however, Dupont came out with earnings that were below estimates and guided lower for 2009, sending the futures straight down. The S&P looks a little weak here but I don't believe this short-term rally is over. The S&P needed a solid 5-10% correction and yesterday represented about a 4.5% pullback. I feel we can pullback more on the S&P, and am expected a S&P short-term bottoming range from 800-828. The key once again is to buy the dips and sell the rips. I will remember this on the next rally. As for shorting, I think we are too thin and could catch a bounce rally, so I would rather not short here, unless we break 800.
As for buying, I like specific names that focus on telecommunications (post when position is complete), semiconductors (FCS, INTC, RFMD, CIEN), technology, shipping (I own EXM and DRYS), real commodities (i was a little early but names like PCU, FCX, CLF, MT, STLD, AA, ACH, KALU) and specific industrial plays (ill post once my position is complete). If we continue to slide, be wary and cautious of firms that have had huge runups and rich valuations (in terms of EBITDA multiples, etc) especially if the firm's earnings prospects could be hampered by currency flucuations/changes or other various factors tied to the economy.
RF Top Pick: GIGM for a takeover play....you can also buy cheap May put protection at the $5 strike.
Also keep an eye of FEED, the chart is looking good!
UPDATE (7:05A) - WOW earnings are rather weak, UTX is a good measure of the economy and they are posting a wide range of guidance of $4-$4.50 vs. $4.20 estimates. Q1 revenues below estimates and profit just met expectations. S&P futures at 827...
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