Coal In Your Stocking: Coal ETF In Play On Joy Global Earnings

As if the risk on trade being turned off and obvious technical problems weren't enough, the Market Vectors Coal ETF (NYSE: KOL) could be in for another rough day today and that comes on top of an almost 12% decline in the past month.

Wednesday's issue: Earnings from mining equipment maker Joy Global (Nasdaq: JOY). That stock accounts for almost 11% of KOL's weight and is currently down 5% in pre-market trading. For its fiscal fourth quarter, Joy Global earned $172.3 million, or $1.61 per share, compared $146.3 million, or $1.39 per share, a year earlier. On an adjusted basis, the company earned $1.82 a share while analysts expected $1.86.

However, the outlook was decent, not stellar. The company expects a 2012 profit of of $7 to $7.40 per share on revenue of $5.3 billion to $5.5 billion, but analysts were expecting a profit of $7.18 per share on revenue of $5.4 billion.

This might be enough to have the already vulnerable Market Vectors Coal ETF in line for more declines. Already rebuffed by some stiff horizontal resistance in the $36-$37 area, the ETF looks primed to violate support at $33 and the declines may not stop until the October low just below $27.50.

Worst of all, Joy Global said it expects productions to increase at a "more tempered pace" due to weakening commodities demand. That means its customers, other KOL components, are being adversely impacted by the global economic slowdown.

Remember, Consol Energy (NYSE: CNX), Peabody Enegy (NYSE: BTU) and Alpha Natural Resources (NYSE: ANR), all facing technical issues of their own, account for over 22% of KOL's weight. Not good.

KOL in your stocking? It looks that way, but the ETF can certainly be had at better prices than what will avail themselves today.