The Kirk Report

November Trends

Historical trends have not been particularly useful this year, but I know many of you like for me to pass this kind of information on so I'm more than happy to do so.

A few things that you may want to know include:

• The Dow has been down only three Novembers in the last 14 post-election years

• Today starts of the "Best Six Months" of the year. Investing in the Dow Jones Industrial Average between November 1st and April 30th and then switching into fixed income for the other six months has produced a +7.6% gain versus the +0.6% gain since 1950.

• Historically, November is the number one best performance month historically for the S&P 500. It is also the number two best performance month historically for the Nasdaq since 1971.

As you can see from CXO Advisory's trading calendar, November tends to start off strong, pull back, and then close with a nice gain:

We'll see how this trends play out this month. As many of you know, September did a great job of producing gains in what tends to be a tough month for the market and October did as well until the last couple of weeks.

Happy Friday

Good morning. Premarket futures are up following a better than expected February CPI and high expectations for big rate cuts at next week's Fed meeting. There's not a lot of news other than the CPI grabbing the market's attention.

Premarket gainers: TTHI, SCA, WSCI, TMA, SHPGY, BA, ZUMZ, COGO, COIN, LSCC, PWER, JASO, ESLR, TRA, SOLF, ARCI, CROX, VM, and QGEN.

Premarket losers: IFON, STEM, CX, PSUN, ANN, HOG, UCBH, and ARO.

At 10:AM we have a report on consumer sentiment and at 1PM Bernanke will speak about "fostering sustainable homeownership" at a meeting in Washington. Bush is also scheduled to speak about the economy but is not expected to issue any new stimulus ideas.

Fridays haven't been good to the market recently, but with +2% gains in the major market averages this week and a Fed meeting to look forward to next week, this looks to be the exception. After all, this morning's inflation data was exactly what the market wanted to hear. Have a great Friday!

Hump Day

Good morning. As everyone tries to figure out how effective the latest action by the Fed will affect the credit markets and economy, premarket futures are pointing to a lower open.

A Wall Street Journal report suggesting that home-equity loans are the next big problem and a profit warning from Humana (HUM) are also in focus. Markets overseas are higher with the exception of China.

Premarket gainers: TWTI, JASO, CFSG, SIMO, TMA, DNDN, HDL, QTWW, CSIQ, DMND, SPWR, TASR, TLCV, MBLX, TTWO, CPHD, GOLD, JCG, FLDR, and CXSP.

Premarket losers: PGNX, DIVX, BLUD, HUM, CPHD, KLAC, DRYS, VIP, UNH, WLP, PKOH, KLAC, and ESRX.

After the opening bell, we only have the weekly oil inventories at 10:30. With oil futures above $108 a barrel it will be interesting to see Wall Street's reaction.

As I said last night, it is not unusual to see some consolidation after the kind of explosive upside move we say yesterday. What we don't want to do is fall back in to the same downtrend that we've seen over the past couple of weeks. A test of S&P 1310 and then sideways consolidation if not another push upward by the end of the day would be the most bullish thing the market could do. We'll see if they can do it.

Have a great hump day!

More Fed Speculation

Good morning. Premarket futures are up as speculation intensifies that the Fed will come in with emergency action before next week.

As hedge funds reel from margin calls and the FBI opens up an investigation of Countrywide Financial (CFC), we don't have a lot of positives or new data to work from. Along with sizeable losses in overseas (especially in China ahead of their own CPI report tomorrow), commodities are also under pressure (metals & oil). The one piece of good news comes from McDonalds (MCD) who reported strong worldwide sales.

Premarket gainers: SPPI, SEED, NLY, TSRA, MCD, TCM, ACLS, SOLF, FSLR, and ANGO.

Premarket losers: KERX, TMA, ABK, CRAI, LVLT, CFC, CRIS, CIEN, MICC, GOLD, and ARRS.

This week’s calendar is fairly light with the market mainly looking ahead to next Tuesday’s FOMC meeting. According to Fed Funds futures, the market is now fully discounting a 75 bp rate cut to 2.25% at next week's meeting. We also have the Texas Instruments (TXN) mid-quarter update later today.

Let's make it a great week!

Super Tuesday

Good morning. It's Super Tuesday and premarket futures are showing a negative bias for the open.

Weakness in commodities (gold and oil) and semiconductors after National Semi (NSM) cut its sales forecast have dampened expectations along with losses in overseas markets. The ISM nonmanufacturing index also fell sharply.

Premarket gainers: GTCB, SPF, SVN, NTCT, YTEC, TMA, ILMN, SVVS, SVNT, HOT, SOHU, GERN, TBSI, AMKR, CE, MOS, POT, PRGO, ARTG, SNDK, BRCM, LVS, TOL, VCLK, MTW, PHM, HOV, and DIS.

Premarket losers: PEG, SIRF, RMKR, WOOF, ARMHY, MLM, SNCR, CPSL, LOGI, SPRD, CS, GRMN, BSX, NYX, NSM, JRJC, ERIC, ASML, PAAS, FDRY, and EBAY.

Along with more earnings news, at 10:AM Fed Jeffrey Lacker will speak about the U.S. economic outlook at a bankers luncheon in Charleston, West Virginia.

We need for the market to find some level of support and see some new buy interest develop in the pullback while continued consolidation, especially within areas of the market that were overcooked in the bounce, would generally be healthy. To be sure, there is always a fine line between textbook consolidation and moving back into bear market sell mode following a dramatic V-shaped reversal. Today will offer at least some clue to the bulls’ resolve now that the “Fed will save us trade” has lost a little bit of its mojo.

Have a good day!

Stagflation

Good morning. Much like yesterday, we're set for a weak open following the higher than expected CPI. Consumer prices rose +0.8% in November the fastest pace for more than two years.

To make matters worse, we have a report from ComScore that hints toward a disappointing online retail sales, Greenspan issuing a warning that the risk of a recession is increasing, and news that Citigroup (C) plans to bail out some SIVs. Like yesterday, most overseas markets are lower.

Premarket gainers: LUM, ESLR, RIGL, BMRN, BMTI, ENCY, EXEL, EXAS, MELI, CBAK, LEAP, PEIX, CISG, DSCM, BMTI, ONXX, MELI, FTEK, CSUN, CAVM, ADPI, CISG, Q, and HOKU.

Premarket losers: NOVL, NBIX, BDK, TIER, CHINA, BBL, LIFC, ACGY, GRMN, CPSL, DNDN, AMZN, ZQK, WCI, ACH, BHP, and XTEX.

Today will provide us with some sense on how motivated the sellers are amid signs of stagflation. For the time being, 1460 in the S&P looks like an important level to break if were are going to see any true downward momentum after the opening bell. Have a great day!

Mixed News & Poor Sentiment

Good morning. We're set for lower market this morning as weakness in global markets weigh heavily on sentiment.

For the most part, investors are sorting through some mixed news. While we have a better than expected report form Lehman Brothers (LEH) and strong report on retail sales, a hotter than expected PPI inflation report hasn't sat particularly well with those expecting more help from the Fed.

Premarket gainers: SVNT, RIGL, DEPO, MATK, ADCT, PSPT, CTDC, GXDX, JRCC, KMGB, JOSB, UMBF, ESLR, CYNO, DOW, JOSB, and XMSR.

Premarket losers: NBIX, BIIB, SCSS, AYSY, ADPI, WSTL, MALL, MICC, VITL, CHA, BHP, LIHR, DLB, CYNO, CKR, ELN, COST, POT, CHNR, SOLF, RIO, CFC, ACH, QCOM, COST, ELN, HQS, DRYS, CSIQ, and RFMD.

It's a new day and I'm looking for reasons (any reasons) why I'm wrong in thinking that lower prices are ahead. With the Fed in the rearview mirror, it will be important to see how the market reacts to both good and bad news over the next few days. In addition, keep an eye on those overseas markets for hints of stability and strength in any recovery attempt we see near-term. Have a terrific Thursday!

Actions Of Desperation

Good morning. Premarket futures are in rally mode on speculation that the Fed is preparing to unveil new plans to boost liquidity. Such actions, if taken, following yesterday's disappointment will most likely irritate market participants even further unless the Fed really does produce some shock and awe to restore its credibility and do it soon. In spite of this speculation, global markets traded lower even though not with the same level of disgust we saw after the yesterday's decision.

Premarket gainers: NEXT, CRME, NUVO, CRIS, MTW, CSIQ, ACAD, GERN, IOM, SCON, LEAP, MPG, LNUX, CEDU, ACTG, SOLF, CPSL, SNCR, CHNR, GERN, XING, DRYS, SPWR, FMCN, TBSI, ESLR, PCU, FRO, SMSI, GIGM, JASO, MICC, FCEL, BIIB, CSUN, RGLD, GRMN, ZIXI, and CROX.

Premarket losers: FRPT, UNTD, COO, OFI, ADY, ULTA, NUAN, FBTX, NWK, and AKAM.

Along with comments by Alan Greenspan this morning, we have the reports on business inventories but this market will remain held captive to the Fed. Clearly, these rumors suggest this morning that some were caught leaning the wrong way and they're praying for the opportunity to get out of some positions at higher prices. As you know from reading other thoughts on the Fed, it isn't unusual for the market to bounce around for a few days (if not produce a counter trend rally attempt) in order to figure out what the Fed's action really means to the market. The stakes are even higher now than ever before because we have only 13 trading days left of 2007.

Be careful out there and resist the temptation to trade every swing we are likely to see from now until year-end. From premarket trading, it clearly looks like the same speculative targets are in back in play - namely China, Solar, and Shipping and those who have to grind it out will be using these groups to press for performance. Take care.

Fed Day

Good morning. Premarket futures are in positive territory as investors await the next interest rate cut at 2:15PM by the Federal Reserve. For the most part, the newswires are fairly quiet this morning with a smattering of corporate news and economist chatter.

Premarket gainers: GNSS, FCEL, TRID, CTIC, PRGO, AVNR, NUVO, MOGN, SMSI, PCTI, GTS, NFI, GY, SAI, TXN, GME, WCG, TELOZ, CELG, HOKU, SDTH, CPSL, TBSI, DSX, BX, MLNM, SOLF, BRCM, ETFC, and CSUN.

Premarket losers: WM, MEDX, NCS, HRB, JCDA, PANC, PLL, WM, ACGY, CRDC, QGEN, and SBUX.

Along with the Fed, we have a report on wholesale inventories at 10:AM and some weekly retail sales reports to look through. Fed days are notoriously difficult to trade and I don't plan to. Have a great Tuesday!

Get Ready For The Fed

Good morning. Premarket futures are positive as investors get ready for the Fed.

Strength in overseas markets, a $10 billion dollar write down by UBS, a strong report from MCD, some M&A activity (see ARXT, PLTE, and MOGN), and reports on online retail sales are in focus. The pending home sales report for October is the only item on today's economic calendar and it will come out at 10:AM.

Premarket gainers: MOGN, LDK, ENER, URRE, NVAX, ARTX, GTCB, CNTF, SGEN, OSIR, VIP, KEG, HRBN, CSUN, CSIQ, SOLF, ESLR, GNSS, ASTI, NICE, SEED, FFIV, MLNM, MR, CPSL, CC, NICE, HOKU, DRYS, DSX, GRMN, GIGM, and PLCM.

Premarket losers: AMC, HEB, LTRE, SGMO, HYTM, NAVI, KCI, ADLR, RSTO, DLB, CELG, RIO, IMAX, TRID, and AMGN.

Futures on the Chicago Board of Trade show there is a 74% chance the Fed will trim its target for overnight loans between banks by a quarter percentage point to 4.25% tomorrow and the vast majority of the other bets are for a half-point reduction. Traders will be watching for follow-through buying interest to develop this week and for moving averages like the 50 day on the major market averages to hold no matter what the news is tomorrow. Let's make it a great week!