If you aren't keeping at least one eye on Eastman Kodak (KODK) today, then I have to question your passion for the markets. You probably don't like fun either.
I'm kidding, of course. As crazy as the Kodak action is if you are a value investor, long-term buy and hold, or a macro person, then this action likely holds little appeal, but it continues a trend of market insanity, unexplained moves, and short squeezes. It continues the success of low float stocks retailers are cashing in on pretty much on a daily basis while shorts are sent to the grave.
Because this day isn't strange enough, we have the FOMC rate decision this afternoon. Then, after the bell, we'll hear from Facebook (FB) , PayPal (PYPL) , Qualcomm (QCOM) , and ServiceNow (NOW) . The four largest companies reporting tonight top a trillion dollars in market cap. Tomorrow, we get THREE trillion-dollar companies reporting on the same day in the form of Apple (AAPL) , Amazon (AMZN) , and Alphabet (GOOGL) . Outside of Microsoft (MSFT) , that means we'll hear from three of the four largest companies in the world on the same Thursday afternoon.
In short, prepare for headline fatigue and noise overload. Ironically, this is likely a good time to dial things back and simply observe the action. Anyone playing the guessing game into earnings is rolling the dice. I can't say we're priced for perfection, because we're way beyond that. At this point, we're playing a game of Fantasy Island where the Fed's only focus is the stock market.
Precious metals will probably be the big watch post-Fed. I envision a sell-the-news reaction. That doesn't mean I'll roll the dice in front of the Fed, but if we can get any kind of initial spike, I will look at a potential fade trade. I would put equities in the same category. I'm not looking to buy-any-dip today, but would consider that if we dipped this afternoon and gapped lower tomorrow. I doubt we'll see much in the way of my theoreticals, but that's what I'm looking for post-Fed.
We're seeing a nice pullback in the cannabis sector. It's only day one, but if we can spend the next few days in a somewhat tight range, I believe cannabis could be setup as a sector to breakout in August. Again, I'm not buying today's dip, but instead I'm watching for consolidation after the recent push higher.
While I'm somewhat sitting on my hands today, I think we're going to see some solid opportunities in the next two to three days, so my view is to keep some powder dry and get ready to jump into the action once the opportunity presents itself.
(Facebook, Apple, Amazon, Alphabet and Microsoft are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL? Learn more now.)
