TODAY’S MARKET – Morons Make Markets Like These

Morons are apparently making this market. Today I read that the Federal Reserve meeting is now dictating trade. Since Friday’s jobs report I’ve been notifying my readers that the Fed meeting has been dictating trade. Apparently the morons don’t read me. That’s lucky for me, and even luckier that they don’t figure things out too quickly, giving my lazy fingers a few extra days to jot down aging ideas. We’re heading to a market correction folks. Wednesday’s pause was simply a test of the 50-day moving average that will not hold. I’m not sure the 200-day moving average will either by next Wednesday’s close, or next week’s end considering we’re dealing with some slow folks here. Today’s economic and corporate factors are highlighted below, so keep reading. Please do follow our stock market blog on Twitter.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Security	03-11-15	YTD	TTM
SPDR S&P 500 (NYSE: SPY)	-0.2%	-0.3%	+11.6%
SPDR Dow Jones (NYSE: DIA)	-0.2%	-0.3%	+10.5%
PowerShares QQQ (Nasdaq: QQQ)	-0.6%	+2.1%	-17.8%
SPDR Gold Shares (NYSE: GLD)	-0.7%	-2.9%	-14.7%
iPath S&P Crude Oil (NYSE: OIL)	-0.8%	-12.4%	-54.4%
PIMCO Total Return (NYSE: BOND)	+0.2%	+1.8%	+7.2%
PowerShares DB US $ Bullish (NYSE: UUP)	+1.1%	+8.9%	+23.3%
iPath S&P VIX ST Futures (NYSE: VXX)	+2.5%	-34.1%	-5.7%

Stocks closed lower on Wednesday despite trading in the green off and on during the day. In my work published on Wednesday, I indicated that the day’s show of strength was a temporary bounce off the 50-day moving average. I continue to expect stocks to test even lower bars for support and not find it as we head for our first market correction in 41 months. This market run is 240% or so deep and well overdue for a 10% retest. The right catalyst is here to cause it.

Today’s Stock Market

Investors are keenly focused on the Federal Open Market Committee (FOMC) meeting due next week and its poor excuse for a policy statement. It will likely say less about Fed patience, and that will allow the dollar to mark parity with the euro before burying it. Needless to say, it will sink stocks as well, as will the build up to the event.

I’ve written extensively on the subject at this point, but for those just tuning in… Rate hikes are bad because they raise the cost of capital for corporate America, thereby raising the bar for economic value creation, which in turn makes market value creation harder to achieve. Even though the Fed has indicated it is mindful of the strong dollar and it will not raise rates immediately, panicked investors who never saw the freight train coming will fear a June rate hike that never comes. It’ll come in September most likely. And when it comes, it’s not expected to be followed by a steep course of action by the Fed, but rather a long drawn out path. Still, even as the cost of capital will remain relatively low for corporate America, most of the morons on the market won’t realize that right away. We need to see a selloff first… FYI, my biggest problem is that I give the market too much credit and sometimes am too early with my forecasts due to my misjudgment of morons as mavens.

In that regard, there is still some concern about Greece leaving the euro-zone because morons are not limited to this side of the Atlantic Ocean. The bigger problem is that morons have enough trouble figuring out their own market, let alone understand the dynamics of another, so media pundits keep counter-productively misleading U.S. investors about Greece. I don’t mind though, as I’ll be buying real estate cheap soon because of it all.

Economic Reports

Just one figure matters Thursday really, or is capable of moving the market anyway; it’s the retail sales data. Pay attention to the figure ex-autos and gasoline for obvious reasons. Let me spell it out for the morons: Gas prices have been extremely volatile lately and will cause confusion about the real state of consumer spending if we don’t look past its impact. Retail Sales excluding autos and gasoline is expected to have grown by 0.5% in February, up from the 0.2% growth seen in January. As long as the result is in line it will support stocks, but it’s probably of no matter considering the much greater weight being given to the upcoming Fed meeting.

THURSDAY’S ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected
THURSDAY
Weekly Jobless Claims	320K	309K
Retail Sales	-0.8%	0.3%
-Ex Autos & Gasoline	0.2%	0.5%
Bloomberg Consumer Comfort	43.5
EIA Natural Gas Report	-228 bcf
Export Prices	-2.0%	-0.1%
-Import Prices	-2.8%	0.2%
Business Trade (Sales)
-Inventories	0.1%	0.1%

Corporate Factors

The Fed released the results of the second round of stress tests, which are relatively insignificant folks except for that they keep some banks from returning enough return to shareholders for the sake of the possibility of a catastrophe. Alas, we have seen that catastrophes are all too common, I suppose because of the morons devising exotic leveraged investment instruments… Anyway, it appears Citigroup (NYSE: C) will get the biggest lift from the data release based on what I’ve heard and the fact that it’s up more than 3% in the after-hours. Bank of America (NYSE: BAC) is down, but the stock is so deeply discounted it should not drop too far. Buy it on weakness friends, considering the Federal Reserve is about to remove critical language that will drive interest rates higher ahead of Fed rate action.

In my report published Wednesday I said sell Shake Shak (Nasdaq: SHAK) ahead of its report because it was overvalued and its inexperienced corporate management team would disappoint a critical marketplace. It happened, and those of you shorted its stock or are using derivatives to bet against it are rejoicing I suppose. SHAK is down 6% in after-hour trading. Thursday you’ll want to buy Ulta Salon (Nasdaq: ULTA) ahead of its report. Thank me later. The options are too expensive though, and considering a market correction is coming, you had better be willing to be a long-term stakeholder in anything you buy now.

HIGHLIGHTED EPS REPORTS
Company	Ticker
THURSDAY
Aeropostale	NYSE: ARO
Allied Motion Technology	Nasdaq: AMOT
Anacor Pharmaceuticals	Nasdaq: ANAC
Antares Pharma	Nasdaq: ATRS
Athersys	Nasdaq: ATHX
BioAmber	Nasdaq: BIOA
BioDelivery Sciences	Nasdaq: BDSI
Bon-Ton	Nasdaq: BONT
CAMAC Energy	NYSE: CAK
Cantel Medical	NYSE: CMN
Central European Media Ent	Nasdaq: CETV
Children’s Place	Nasdaq: PLCE
Chinacache Int’l	Nasdaq: CCIH
ChipMOS Technologies	Nasdaq: IMOS
Clubcorp	Nasdaq: MYCC
Constellium	Nasdaq: CSTM
CTI BioPharma	Nasdaq: CTIC
CTPartners Executive Search	NYSE: CTP
Cytori Therapeutics	Nasdaq: CYTX
Derma Sciences	Nasdaq: DSCI
Dex Media	NYSE: DXM
Dollar General	NYSE: DG
E Commerce China Dangdang	Nasdaq: DANG
El Pollo Loco	Nasdaq: LOCO
eMagin	Nasdaq: EMAN
Epizyme	Nasdaq: EPZM
FutureFuel	NYSE: FF
Gas Natural	Nasdaq: EGAS
Gastar Exploration	NYSE: GST
Genesco	NYSE: GCO
Global Partners	NYSE: GLP
GSV Capital	Nasdaq: GSVC
Hawaiian Telcom	Nasdaq: HCOM
Hill Int’l	NYSE: HIL
Houston Wire & Cable	Nasdaq: HWCC
Hovnanian	NYSE: HOV
Ignite Restaurant	NYSE: IRG
InspireMD	Nasdaq: NSPR
Investors Real Estate Trust	Nasdaq: IRET
JA Solar	Nasdaq: JASO
Jamba	Nasdaq: JMBA
JG Wentworth	NYSE: JGW
Journal Communications	NYSE: JRN
Kirkland’s	Nasdaq: KIRK
KMG Chemicals	NYSE: KMG
Kratos Defense	Nasdaq: KTOS
LGI Homes	Nasdaq: LGIH
Lifetime Brands	Nasdaq: LCUT
Luna Innovations	Nasdaq: LUNA
Magnetek	NYSE: MAG
Medifast	NYSE: MED
Metaldyne Performance	NYSE: MPG
Natural Gas Services	NYSE: NGS
OHA Inestment	Nasdaq: OHAI
OncoMed	Nasdaq: OMED
ORBCOMM	Nasdaq: ORBC
Peregrine Pharmaceuticals	Nasdaq: PPHM
Ply Gem	Nasdaq: PGEM
Protalix Biotherapeutics	NYSE: PLX
Qiwi	Nasdaq: QIWI
Re/Max	Nasdaq: RMAX
Revlon	NYSE: REV
Rice Energy	Nasdaq: RICE
Rice Midstream	NYSE: RMP
Shanda Games	Nasdaq: GAME
Springleaf	Nasdaq: LEAF
Stein Mart	Nasdaq: SMRT
Straight Path Communications	Nasdaq: STRP
Sunesis Pharmaceuticals	Nasdaq: SNSS
Synta Pharmaceuticals	Nasdaq: SNTA
Tekmira	Nasdaq: TKMR
Towerstream	Nasdaq: TWER
Trovagene	Nasdaq: TROV
Ulta Salon	Nasdaq: ULTA
Vail Resorts	NYSE: MTN
Zumiez	Nasdaq: ZUMZ

DISCLOSURES: Kaminis is long BAC. Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.