This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Day Ahead: Blind-Date Jitters

With the advent of monthly-fee dating services, gone is a certain element of fear that had always been built into the blind-date equation. Will the person be as good-looking as they sounded on the rotary phone? Were they lying about their age? They sure sounded as if they enjoy sipping on Geritol -- while on the rotary phone. What will the exit plan be if things head horribly south in 15 minutes?

But, while much of the blind-date fear has fallen by the wayside -- thanks in large part to Facebook's (FB) Instagram -- there is still that sense of unknown. As I have gone through all sorts of research on stocks and the market of late, the fear has been jumping off the screen from itty-bitty second-quarter footnotes on 10-Q filings. It's been apparent in trend analyses of items as simple as sales and segment margins -- spare the extra second and step beyond praying at the altar to the "consolidated op. margin," as it's quite helpful in determining a more complete thesis on the company. Finally, I've heard it via recent analyst day circuits.

In fact, to really take it to a level of creepiness, the point came long ago at which certain words -- whether good or bad -- began to appear in 3-D images in bold, black ink. The pros will understand what I just said; others might say some simple laughter will put me at ease.

Then there are market happenings that must be watched. I have often stressed the importance of maintaining a running log of these, and I hope you've been following suit. Right at this very moment the true state of ugliness is trapped beneath the following: (1) initial strength in stocks at the session open; and (2) head-fakes at the close of trading that mask what went down in many sectors from 11 a.m. to 3 p.m. EDT.

Prep Course for Daily Blind Date with Stocks

¿ Realize that the market is not under pressure from Apple (AAPL - Get Report) having near-term supply constraints. (Think: the stock has been sold, so where has that money gone? Maybe it's passed into defensive utilities?) It's not suffering from a Facebook CEO that is trying to extract top talent from Russia, Papa John's (PZZA - Get Report) giving away free pizzas, nor even from Yahoo! (YHOO - Get Report) grabbing headlines every time the new CEO speaks. See the absurdity in those comments? The market, as I see it, is comparable to a person trapped in a box slowly filling with water: It does not know where it can turn to escape to safety. That, coupled with the typical apprehension around earnings season -- which is only magnified now, as we have entered fiscal-cliff danger zone -- is the sentiment and realism that are driving stocks after a euphoric event.

  • Ask yourself this if you're yearning to jump in. In the Institute for Supply Management manufacturing survey, is the consumer-confidence measure that may have transmitted into it a reflection of prior stock price appreciation? If so, is that measure at risk of reversing in October, November and December?
  • What I characterize as "garbage stocks" -- shares of companies with weak fundamentals and trading at discounts to peers in terms of valuation -- are not attracting bottom-fishers. How do I arrive at this conclusion? The "garbage stocks" continue to fall further from their 50-day moving averages.
  • What I characterize as "sexy stocks" are putting in weak defenses of their 50-day moving averages, looking at volume, or they look destined for a test. If these companies continue to deserve their valuation spread relative to "garbage stocks," based on superior fundamentals, shouldn't there should be greater interest on a pullback? The fact that there isn't suggests further cream must be sliced from the toppy valuation.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
Back to Nasdaq


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs