Weekly Notes
Markets took a gut shot on Friday after the ultra-bullish announcement of 295,000 new jobs created in February inversely hinted towards an earlier than expected rate hike disappointment. Even though the quality of job creation remains questionable with the leisure and hospitality sector seeing the greatest benefit, every other category with the exception of mining/logging still saw modest improvement. The big concern at this stage of the cycle if new highs can still be recorded in this type of environment with rising rates and a stronger dollar.

Volatility Index (VIX) screamed 8% higher on Friday as momentum to the downside accelerated throughout the day. Seeing some stability this week will be paramount if the aging bullish trend is to continue. Gold Futures (/GC) had a tough week and closed at the low point of the year after giving up an astonishing $30 per ounce intra-day. The typical safe haven play is expected to now have more competition within other asset classes should their rates inch higher. The other big surprise coming out of last week was the 10 Year Treasury’s rapid climb to 2.25% as rates have seen a tectonic shift in sentiment over a rather short time frame.

Earnings season is all but winding down with the exception of several key retail names slated to report during the course of the week. With both monthly retail sales and consumer sentiment numbers also scheduled, the importance of a strong consumer showing can’t be underestimated as the discounted price of oil should convert into more discretionary spending. Another key retail headline will be Apple’s unveiling of the much anticipated i-watch tomorrow. This event will open the next chapter in Apple’s ongoing success story, and the stakes couldn’t be higher with the building hype surrounding the product. News of Apple replacing AT&T for a coveted spot in the DJIA boosted shares on Friday in wake of the broad-based selloff.

What to watch for this week will be the results of the Bank Stress tests scheduled for Wednesday immediately following the market close. The eventual rate hike may benefit banks over the long term if reserve requirements remain in check. Any failures may potentially spark apprehension which could further impact the fragility of the market.

My Trader Thoughts
Oil – /CL STILL the focus – Also Nat Gas /NG, selling puts on the oil and Natural Gas futures still paying off this month and now focusing on actually building a position in the ETFs for them in both USO & UNG for a long term holding and would actually cost average these both if prices were to drop further. These are both good long term holdings in which we can sell OTM calls against going forward. Vix is in itself volatile. Using UVXY near term VIX futures ETF to sell options premiums for hedge. It seems to be the focus more so than the VIX.

Watching the 3 month Hi & Lows being made over 8000 stocks tracked by the ARCA exchange. As long as that is bullish, I assume there will still be buying on the dips, using low vola troughs to buy VIX insurance and cheap put protection. I’m also watching XLF fo reaction to the Banks Stress test results on Wednesday. Good or bad, it will remain to see how the market prices that in. Retail sales drops in domestic will be fuel to the fire of GDP dropping from the dollar.

Major Earnings for the Upcoming Week:
Monday:
A.M. – N/A
P.M. –CASY, KFY, QIHU, UNFI, URBN
Tuesday:
A.M. – BKS
P.M.– PAY, WSM
Wednesday:
A.M. –BWS, EXPR, URA
P.M. –KKD, SHAK

Thursday:
A.M. – DG, HOV, MTN, PLCE
P.M. – ARO, LOCO, ULTA, ZUMZ

Friday:
A.M. –BKE, HIBB, TA
P.M. –N/A

Economic Releases (3/9 – 3/13):
Monday:
9:00 am CT – Labor Market Conditions

Tuesday:
8:00 am CT – Small Business Index

9:00 am CT – JOLTS

9:00 am CT – Wholesale Inventories

Wednesday:
9:30 am Oil Inventories
12:00 pm CT – 10 Year Bond Auction
1:00 pm CT – Federal Budget Balance
3:30 pm CT – Bank Stress Test Results

Thursday:
7:30 am CT – Weekly Jobless Claims
7:30 am CT – Retail Sales
7:30 am CT – Import Prices
9:30 am CT – Natural gas Inventories
12:00 pm CT – 30 Year Bond Auction

Friday:
7:30 am CT – Producer Price Index (PPI)
9:00 am CT–Consumer Sentiment

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