Sorry this is so late- we had a cable outage at our office this morning negating my 6:30AM arrival. But here it is: This is another âwhaâ happenedâ piece. Most people who werenât around on Thursday donât have any idea why the markets continued to rally whereas most people who were around to trade on Thursday, well, they donât understand either. It comes down to one company :Wells Fargo. A seemingly innocuous headlines crossed the newswires at 8AM Thursday morning: âWells Fargo Sees 55 Cents Per Share For First Quarter.â Except that the estimate was 31 cents. They went on to say that their Wachovia acquisition is going even better than anticipated. What jumped out at me was that they reported another quarter of 10% plus revenue growth and stunningly, they expect to have net income of $3 billion for the quarter! The company reiterated that they should save about $5 billion a year by combining Wells and Wachovia operations and had a 41% increased in unclosed mortgage applications. Now, letâs take all of this at face value (it is still up for debate of course because of the history of accounting shenanigans in the industry, but letâs say everything is pure because, well, Iâm an optimistic if idealistic guy). What this news indicates is the first absolute concrete evidence that the end of the world just might not be near. If in this environment WFC can earn $3 billion, it implies that things like nationalization, government interference, and unfettered regulation just might not be the way to go. More to the point, it automatically gave instant credibility anew to the idea of a sound banking system much less capitalism. It shows that things, as bad as they have been, have a shot to get better. For day traders, weâve witnessed things like the FAZ falling from 115.50 to 10.50 in days. Maybe there is a reason for this. Even if there is not and this particular WFC story is smoke and mirrors, it is worth noting that both good news as well as the stream of bad news weâve been used to for the past couple of years can move markets extraordinarily wildly these days. With the exception of the Nikkei which was mildly weaker overnight, every major world market was closed for Easter Monday. Oil is lower, gold is up, and the dollar and bonds are quiet. In the early going, rumors of a pressuring of GM to go Chapter 11, a GS share offering, and riots in Thailand are pressuring the futures. With many people away on vacation and a relative dearth of news, look for a fairly uneventful day today following a weaker open. The middle of the day will likely be extraordinarily placid. There should be a little short covering early in the morning after the run-up of recent weeks, but a ploddy slow downside day is the most likely scenario to occur today with banks in particular as todayâs benchmark. Reiterating- Please understand that if the ideas do not get to the hoped for set-ups cited below, more often than not, one should not blindly trade the symbol next to said idea. If the whole story is not there - If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specifiedIf something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified- Good- The following stocks have good news and/or a strong technical pattern TTWO- recommended as takeover play on âFast Moneyâ on Thursday night SIVB- closed near a high MS- closed near a high GYMB- closed near a high after posting great earnings USB, NTRS, ZION- strongest closes of the banks in the banking sector NFLX- broke to new all-time high today and closed near intra-day high TROW- closed near intra-day high FMBI, STSA- among smaller banks closing near their highs SKT- closed near high of day LUK- continued huge rally in closing near intra-day high AVB â among the strong REITâs closing near its high HIW- closed near high of day FNF- broke out towards high of year near end of day Thursday YHOO- rumored to be in talks with MSFT again WLP/ESRX- ESRX buying division of WLP Bad-The following stocks have bad news and/or a weak technical pattern BA- warned on earnings estimates after-hours Thursday WFR- warned on earnings outlook CVX- sees its 1st quarter earnings sharply below that of the 4th quarter; XOM may follow GNW- will not participate in the U.S. Capital Purchase Program PDCO/HSIC- mentioned in âSell Blockâ segment of âMad Moneyâ Thursday night GS- looking to do share offering to raise money to repay TARP WFC- downgraded at Keefe with price target of 12 TRE- negative âBarronâsâ article SPW- warned badly on earnings Earnings: None today Good luck today. Erik R. Kolodny