Market Overview

PreMarket Prep Recap: Yo-Yo Market And After-Hours Overshoot On Ackman's New Stake

PreMarket Prep Recap: Yo-Yo Market And After-Hours Overshoot On Ackman's New Stake

Overnight volatility parlayed into volatility during today's PreMarket Prep Show and along with a few earnings reports.

Red To Green And Back To Red And Green Again

The weakness from the end of Monday's session had follow through in the overnight session and had market participants preparing for a red day, until it was rumored the Dec. 15 tariffs on China were going to be delayed.

That news took the stock indexes into the green just before the open, only to tail off once again and then rally back to match the pre-market high.

Besides the trade war back and forth, it was noted the stock indexes were in the process of the rollover from December 2019 to March 2020 futures contracts. On many occasions, the rollover splits the liquidity between two contracts and induces choppy price action until the rollover is completed by the end of the week.

Ackman Moves Into Agilent And The Bots Follow

Just after the close on Monday, it was announced Bill Ackman's Pershing Square amended 13F filing revealed a 2.916 million share stake in Agilent Technologies (NYSE: A).

As so often when this type of activist action takes place, high-frequency traders seize on the news and with less liquidity take the issue to exaggerated levels.

On this occasion, the issue far surpassed its all-time high made on Monday at $82.47, racing all the way to $87. At that level, the hammer came down knocked the issue down under $85 by the end of the after-hours session.

Although the issue is firmly in the green in today's session, its high as of 11:00 a.m. EST is only $83.80.

How Will Stitch Fix React?

After the close on Monday, Stitch Fix Inc (NASDAQ: SFIX) announced an EPS beat along with a sales beat. The issue traded nearly $3 higher ($28 area) when it was being discussed during the show.

It was noted in the past when the company posted better-than-expected results it had traded higher off the open, but on a few occasions was unable to hold all of the gains.

For example, following its second-quarter beat on March 11, it rallied from its prior day close of $26.98 to $37.73, but fell back to end the session at $33.78. That blowoff high marked the start of a decline that took the issue to a low of $21.71 on June 20 before embarking on another rally.

Following a volatile open, it spiked to $26.65, rebounded to match the pre-market high of $28.45 and then reversed course. At this time, it's drifting towards the lows for the session.

Eric Krull Joins The Show

Midway through the show, Eric Krull, founder at Krull Asset Management LLC and co-author "The Lifecycle Trade" joined the broadcast. Through detailed slide, he went over the winners and losers from 2019 IPO market.

At 8:35 a.m. EST on Wednesday, Gil Morales of The Gilmore Report will be our guest and provide insight into the recent trading action.

In an extended hour, Sean Udall, CIO of Quantum Trading Strategies will join me to discuss issues on his buy and sell radar. Also, Robin Deshayes, President and Chief Strategy Officer at Miltonian Capital Management will provide commentary on PG&E Corp (NYSE: PCG) following its settlement of $13.5 billion with California wildfire victims.

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