The Week Ahead

1.Geopolitical and Fiscal Events. Monday sees Federal Reserve Vice Chairman Fisher at night in Atlanta. Tuesday sees Federal Reserve Richmond President Lacker speak. Wednesday sees Federal Reserve Presidents Lockhart and Williams speak at the Atlanta Federal Reserve Confab. Thursday sees Federal Reserve Chairman Yellen speak at the Atlanta Confab. Friday sees Federal Reserve President Kocherlakota and Bullard speak at the Atlanta Confab.

2.Economic Releases. Releases of note this week include the weekly chain store sales, oil/gas numbers, mortgage applications and personal income, Chicago PMI, construction spending, factory orders, nonfarm payrolls and the unemployment rate.

3.Earnings Releases. Notable releases include CALM UTIW SNX CONN MON AYI MU KMX.

Conns Inc. (CONN)

Computer and entertainment retailer Conns Inc. (CONN) will report earnings before the open and estimates are $0.63 versus estimates of $0.74. There is some exceptional upside to this name and it is worth a look. 

conn

Finish Line (FINL)

Finish Line (FINL) will report earnings in the morning and estimates are $0.86 versus $0.87. Despite the anemic earnings growth, the stock has some nice upside and is a better value than competitor Foot Locker (FL). 

finl

The Madison Letter Weekly Update

Since inception, our overall timing return is 76.78% versus 44.71% on the S&P 500 for excess return of 32.06%.

Madison scores on the major indexes are in a wide range from -13 to -10. Stocks and indexes have fallen in the past week.

The range between the buy and sell points is now average. As an example, the S&P 500 range was 68 points at the low and is now 98 from 104 points a week ago. As volatility rises, this expands. Witness at the October low the range was 169 points.

Also, in tracking the range between the 2 year and 10 year is now 138 basis points. Short term rates are on the rise while long term have fallen. This needs to be watched. There are implications.

There are now two open positions, a buy on TRF and a buy on USO. We began to offer a buy and sell strategy via our Madison Market Timing Indicator at the beginning of April of 2007. There are now 24 open and closed winning trades to 8 closed losing trades with our market timing results. This column replaces the Morning Matters on Fridays.

Caterpillar (CAT)

Caterpillar (CAT) has now dropped $30 since July of 2014. $80 appears to be technical support and the name is clearly out of favor. If you have an inner Warren Buffet, then this name may be worth a nibble as the current correction plays out. 

cat

Weekly Charts Updated

We are going to continue making Thursday our chart section in only Superstock. That said, we are changing the format. If you want to follow the S&P 500, then you will need to sign up for www.superstockinvestor.com at the website. Each week in Superstock we track the S&P 500, NASDAQ Composite, Russell 2000, Emerging Markets (EEM), 20 Year Treasury (TLT), U.S. Dollar (UUP), High Yield Bonds (HYG) and Corporate Bonds (LQD). This alone is worth the price of the service as signals on the NASDAQ Composite returned 15.65% versus the index return of 18.93%.

 Last week we focused on the iShares Barclays 20 year Treasury Bond Fund ETF (TLT) as we sold out of puts in Options Index Trader just in time.

It remains in an uptrend that refuses to break and is a dollar higher than a week ago.

tlt

 Potash (POT) has been weak recently and our indicator did a nice job of catching the downtrend. We would not commit new funds to this name right now.

 pot

AK Steel Holdings (AKS)

Steel stocks are trying to find a bottom. A name with a great deal of upside is AK Steel Holdings (AKS). The stock is under $5 so many institutions will not touch but hedge fund portfolio managers will push this name around if the steel stocks rally more. Needless to say it is a better speculative buy than some Brazilian penny stock in the steel space. Worth a look as a speculative name with a tight stop at $3.98. 

aks

Portfolio Update

The S&P 500 for now has peaked out at current levels. The portfolio remains 50% invested long, 0% short and 50% in cash, net long 50% with profits taken most recently in Red Hat(RHT). We are now at a value of 1019.14% from 1014.72% through Monday. We finished the year at a value of 951.10 up 29.86% for the year. Our current value is 1019.14% which puts us up 68.04 or 7.15%.

Below are the year by year results on a cumulative and absolute basis:

ssi ytd

IMG SRC=”/ssi/images/mbr/morningmatters/2015-03-24/” width=”” height=”” alt=”” border=”0″

It appears for now that 2100 on the S&P 500 has become support and 2150 is resistance. We are now at 2104 which is higher from a week ago.

Remember these returns are total returns with the average change for all winners and losers is 9.10% per idea. Our batting average of closed winners and losers is 70%. The portfolio is up to a value of 1019.14%and from inception when it began at 0% in April of 2008. The performance on the Uncommon Wisdom Daily Portfolio Tracker is a bit higher due to dividends which they add in. We have never added in dividends so our weekly results are understated since 2008.

The Russell 2000 is beating the S&P 500 on a daily basis.

Worthington Industries (WOR)

Worthington Industries (WOR) will report earnings after the close Wednesday. Estimates are $0.33 versus $0.57. The stock is now cheap as cheap gets. Worth a look if it can surprise to the upside. 

wor

Sonic Corp (SONC)

Sonic Corp (SONC) will report earnings after the close on Tuesday. Estimates are $0.12 versus $0.07. The stock is now “stupid expensive” and VERY overvalued. It is due to fall back to earth. Avoid for now. 

sonc