Monday, April 1, 2013

March ISM Projection, Notes, & Performance Update for Week of 3/25 - 3/28

With regards to some of the names that we have discussed, AVID continued its downfall.  Although not very liquid, the strangle position we suggested last week got off to a good start.  We note that while daily volume of the May options increased, open interest did not.  However, open interest spiked for both the $7.50 Jun13 call and the $5.00 Jun13 put.  But again, the long call on the stock that we made has turned out to be a bad one.

The long call on BCOR has been ok, although its performance is below that of the S&P 500.  IACI has done well as it has more than doubled S&P 500’s positive gain since we made the suggestion.  As a reminder, IACI has a dividend yield of 2%+.  We do not include the dividend yield in our calculation.  On the short side, FB has done well, also outperforming the S&P 500.  As usual more detail is provided in the tables and chart at the end of this post.

This upcoming week will be a busy one as many market-moving economic indicators are released.  They include the manufacturing ISM (March) tomorrow morning at 10am (ET).  The latest consensus is 54.0 compared to 54.2 in Feb.  Our estimate is slightly lower, 53.8.  Although we have not been very accurate lately, some of the indicators we track show that March's manufacturing activity may have declined slightly, but a bit more than what the Street is expecting.  Unless the results are significantly below or much higher than the Street's estimate, reaction by the market may be limited due to the employment report scheduled to be released later this week.

ISM services, along with the ADP employment report will be released on Wednesday (4/3).  Those are followed by initial jobless claims on Thursday and the ever-important but always questionable BLS employment report on Friday.  Regarding the employment report, we will post our NFP projection on Thursday.


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