Intraday Commentary ~ 09/30/2009

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10:08am
I have to get on a flight, but lets hope this market can break 1040 today.. again notice how a lot of my stocks are underperforming the SPY. WYNN, SBUX, AAPL, AMZN, LVS, GYMB (those are my favorite shorts).

9:55am
PMI numbers were horrible… that’s what caused the sudden shock in the markets to the downside. Closing around these levels will give the bears an opportunity to take the market down in october… any level under 1040 will be regarded very bearish.

9:46am
Just as i spoke AMZN fell 1%, and AAPL is now negative.. amazing. That’s why i’m telling you to be selective with your shorts!

9:41am
The fact that the SPY cannot hold gains, despite the great GDP news, should be viewed as somewhat bearish. Again the bears need to sell this market off dramatically today in order for me to be convinced in a bloody october… I recommend sticking to shorting individual stocks. I took another Short in AMZN today upon strength. AAPL is up slightly. But my other stocks: WYNN, LVS, SBUX etc. are down way more than the SPY.

9:20am
CIT is weighing down on the market, the bankruptcy of this company could mean retail will suffer. Nonetheless with improving economic indicators, bigger banks might be willing to lend.. once the economy turns sour, the reluctancy of lending could cause this bank to go under.

9:00am
GDP at -0.7% MUCH better than expected, ADP report showed losses of jobs that were worse than expected. As the GDP report came out, we had a nice boost in futures, and then we came back down. I expected a GDP that was at/slightly better than consensus but didn’t think it would be that good because the depletion of inventories should have pushed GDP down a bit. Apparenlty not.. haha.

SPX Resistances to break:
1065 is the boost break (if this breaks we might get a shot up to the next resistance)
1068 (daily resistance/monthly 20 SMA)
1075 (triple top potential)
1090 (our final possible target for this rally)

SPX Supports:
1059 support for H&S on the 10 minute neckline
1053
1035-1040 range (a break of this would make me bearish)

Today is the last day of the quarter and month, any close below 1040 is going to be interpreted very very bearish, any close above 1075 would leave room for a continuation in the rally next month.

Today we will see the revision number for GDP. Even though the economist consensus is between -1% to -1.5% (at -1.2%) i think that might be too bearish. We revised it down from -0.8% last time. And most importantly the reason why it would be in that -1% to -1.5% is because deplition of inventories. I think the GDP results could come in around the consensus but the inventories depliting will be a good sign for the economy. I’m really unsure how the market will react to such news.

We also have an ADP report today, and jobless claims for september tomorrow.

About FocalEquity

Sun Tze is one of the founders of FocalEquity.com. After going through multiple transitions, Tze, Charlie Cheng and their new team are bringing new changes and features to the new FocalEquity.com in 2011. Tze is specialized in financial modeling and has a masters degree in Finance.