Stock Market Analysis September 19 2013

Pre Market Briefing: September 19 2013

Futures are up this morning. But they have faded off their highs. So you can bet I’ll be watching closely to see where we open. And obviously…

The ten-million dollar question is going to be… “can the stock market can hold yesterday’s gains?” And there are a few ways to broach this subject.

Trying to reason our way to the answer is one approach. But it’s a convoluted one that’s not necessarily actionable. Yes, the Fed easing should be bullish for stocks in the short term. And paradoxically it should also indicate economic data is weaker than expected (which would be bearish for stocks, in the longer term, right?) On the other hand it’s especially bearish for the US dollar – so maybe that’s bullish for stocks? And we haven’t even talked about the implications of real inflation ramping up.

Man…

My head is spinning already.

So while I think it’s helpful to be attuned to monetary and fiscal policy discussions around the globe (and particularly in the US) – if you’re in the business of trading you should let the market action be your guide. And if you’re in the business of investing you should always be on the lookout for value.

I prefer you to refine your trading and investing methodologies, than try to place bets on your interpretation of macro happenings around the world. So here are the stocks I’m looking at today:

My Portfolio on September 19 2013:

Just like the rest of the market, I’ll be looking to see if my stocks can follow through on yesterday’s afternoon action. I’m a little sceptical about SNV because of the late day fade last trading session. Plus the action in KRE (regional banks) yesterday was atrocious. So we’ll need to see some strength in that sector-ETF before I can get very bullish about deploying more cash into SNV.

On the other hand, if the market does gap up and grind higher, I think my BRKS and AEG should participate. I’ll also be keeping an eye on IAG. Gold is looking strong pre-market but after yesterday’s success I’m apt to jump on a pullback (should I be so lucky). ChessnWine pointed out the high buy volume on GDX yesterday. There could be interesting things afoot in the gold miners.

Above all I will try to be cautious and patient. The last thing I want is to get trapped up here. Even if the market is higher 6 months from now, it doesn’t mean we can’t have a debt-ceiling-induced sell of in the interim. So let me ask you…

What are you planning on trading today?

Stock Market News and Ideas From Around the Internet:

John McCain wrote an Op-Ed in Russia’s Pravda Newspaper

Does The Fed Have a Tiger By The Tail?

Bank loans don’t support a taper.

Free Value Investing Videos.

September 19 2013: Stock Market Day In Review

All in all that was a pretty constructive day. Stocks didn’t show the gains that futures were telegraphing. But they held up relatively well. So I’m sorry to say it but there isn’t all that much to report.

I did keep an eye on IAG for a trade, but it looked weak from the get-go. So I refrained from making any purchases for now. Plus, given the huge drop in UUP yesterday I’m kind of expecting an oversold bounce in the US dollar, which might provide a good entry point for gold next week. But today I felt like the LONG GDX trade was a little bit too obvious.

Along the same lines though…

I also did some research on NSU this morning. The company looks well run and very well valued. The only problem is that all of their operations are in a small African country I’ve never heard of. And that makes me a little nervous. So maybe more research is required?

The rest of my stocks did just as I expected: entirely nothing. AEG, STLY and BRKS flip-flopped around while TINY looked for new lows and SNV followed suit. Although in the latter case it was reassuring to see some late day strength and a close off the lows.

With regards to Synovus:

I was thinking about adding to SNV this afternoon when it was down around $3.19-3.20. But I refrained because of the broad weakness in KRE. Like many of the regional banks, SNV ramped up in the last few months – arguably because of expectations that tapering would lead to rate increases which would be beneficial to the regional banks.

However I believe SNV is much cheaper than most other regional banks. And while it may suffer from a low-rate environment, the year-to-date price increase has been a result of a return to profitability and repayment of TARP loan. And despite a future

So while I think it’s wise to stay tuned to the Georgia real estate market, and the sell-off in KRE might be a temporary setback, shares of SNV will ultimately be much higher from current prices. Now hopefully I don’t end up eating these 3-6 months from now.

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