This week we will start to hear first quarter earnings results. Before the New York market open Wednesday we’ll hear from Monsanto (MON). After the bell Wednesday Recycling behemoth and steel manufacturer Schnitzer Steel (SCHN) and retail giant Bed Bath & Beyond will report. I haven’t looked at analyst estimates for any of these names. Market volatility is generally cheap here, as is volatility in many individual names. My bias is to own calls and puts into some earnings announcements this month. A quick view of the charts has me reaching to own calls in BBBY and puts in MON. Generally speaking, you can see how the street will react to earnings by looking at the supply and demand patterns before the announcement. As you can see from the charts below, Monsanto (red) is in a downtrend and looks distributive. Therefore, it will likely trade lower after results. On the flip side, BBBY (blue) is in an uptrend and is being accumulated. It will, therefore, likely trade higher.

Trader Art - MON/BBBY Oil on canvas

There are also four US Treasury auctions this week. Keep these times in mind for volatility in currency markets.

Monday: 13:00 EST US Treasury to auction $8 Billion in 10 year TIPS
Tuesday: 13:00 EST US Treasury to auction $40 Billion in 3 year notes
Wednesday: 13:00 EST US Treasury to auction $21 Billion in 10 year notes
Thursday: 13:00 EST US Treasury to auction $13 Billion in 30 year bonds

I wanted to be a part of it so I became it. And the beat goes on.

Meanwhile, back at The Factory, the internet continues to be the largest communication platform I’ve ever been involved with. If I didn’t own the darned thing, I wouldn’t be where I am–in hiding.

On another note, some noteworthy happenings impressed me recently while speaking to my assistant, Tonya:

–Last week Goldman Sachs downgraded EPS estimates for the banks by 15%.

–The federal reserve hiked interest rates by 25 bps from .50% to .75% on February 19th in a surprise move. Since then, stocks have marched higher while volatility has slunk lower. There are various rumors making the rounds that the fed will repeat it’s actions from February–hike rates by 25bps in another “surprise move.” Moves are moves, but I definitely appreciate surprise moves and use them often.

S&P Futures / VIX

–Ratings agency Standard & Poor’s changed their ratings on Greece last week from negative to stable. Does anyone care about rating’s agencies anymore? Haven’t they been proven meaningless?

–I will be working the Ironman II premier in various locations, including Los Angeles. My client–Ms. Pinky Megiston–is involved with the show so though I’ll be there, absolutely no one will have any idea who I am. After all, not even I know who I am anymore. Whenever I have lost my mind in the past it has always led to bigger and brighter things. This time shall be no different.

I have written about downside insurance in such names as (RIMM) and Prologis (PLD).

I sold some of my RIMM puts this morning. RIMM announces earnings this afternoon.

I am starting to buy upside insurance (calls) in the energy sector. I like this sector for a trade.

Check out Valero (VLO) and Tesero (TSO).

Peace

Click to Enlarge

As reported in the Wall Street Journal this morning, Prologis (PLD) has been added to the list of stocks that cannot be sold short. The article calls into question why it is on the short list, as it has little to do with finance or lending.

This is further proof that Prologis common stock is going to the pink sheets.

Why will they trade on the pink sheets? Because there are no requirements to trade on the pink sheets. The pink sheets are analogous to the “where are they now” record bins at your local record store.

It sure feels like there is a circle of cohesion at work here. Executives have created a complex entity. Securities regulators and auditors are signing off. Nothing changes in the markets, just the players involved.

When the plug gets pulled on this one, they will all say “how could we have seen this”.

I’ll give you the answer now. Your ability to see anything is impossible when you are wearing a blindfold.

Being on the no short list has many many unintended consequences. This is great news for those of us who are positioned for the inevitable downside move. The path of least resistance is zero. The fact that it has been added to the no short list is nothing but gasoline on the fire.

Peace

I know what to do do when your earnings leave you.

You do voodoo.

Chris Isaac makes voodoo with his voice and guitar.

I do voodoo with pictures.  Tonight I do voodoo with Research In Motion (RIMM).

My voodoo says the stock sees $70 soon after earnings this Thursday.

After $70, it will head down to $45 and find support there.

Peace

Click to enlarge