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Two Ways: JPMorgan Cuts Dividend


Strengthen your portfolio in good times and bad.


Extraordinary Times, Extraordinary Measures

JPMorgan Chase (JPM) cut its dividend last night by 87%, from $0.38 per share to $0.05 per share. CEO Jamie Dimon explained in a statement that extraordinary times call for extraordinary measures, and that the move is aimed at strengthening the company's balance sheet "even if conditions worsen significantly."

By retaining the $0.05 payout, at least for the time being, it's expected the bank will be able to hold on to an additional $5 billion in common equity per year. The market seems to like the news: Shares of JPMorgan are up 5% in pre-market trading.

Banking bears should check out Professor Adam Warner's SKF Wags the Dog.

From the Bull Pen: The markets may actually praise the move, but far too much uncertainty surrounds the banking sector to be a bull. Instead, one can attempt a play in the broader indices using the Ultra QQQ (QLD) for a short-term trade. A sell stop can be set 2% below entry.

From the Bear Cave: For a longer-term trade, bears can consider playing the downside in financial-in-drag General Electric (GE). The stock could rally to $11.50, providing bears with a better entry.

Quick Check Around the World

Asian trading closed with the Hang Seng -2.86%, Nikkei -1.46%, Taiwan -1.06% and Shanghai -4.56%.

Glancing towards Europe, we see the CAC -1.13%, DAX -1.73%, FTSE -0.86%

As of 8:00 AM EST, S&P Futures are trading +7 to 752, and Nasdaq futures are +4 to 1140.

A Look At Commodities

Crude oil is trading -0.10 to 38.34. Gold is -5.60 to 989.40. Silver is -0.90 to 14.360, and copper -0.15to 143.55.

The dollar index is -0.0850 to 87.3450.

On the Radar


09:00 S&P/CaseShiller Home Price -24.00
09:00 S&P/CS Composite 20 YoY
09:00 S&P/Case-Shiller US HPI
10:00 Consumer Confidence 36.0
10:00 House Price Index MoM
10:00 Richmond Fed Manufacturing 36.0
10:00 Bernanke Report on Economy & Fed Policy
10:00 House Price Purchaser Index

Click here for the full trading radar.

Turnaround Tuesday strikes again? We shall see. Good luck!

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No positions in stocks mentioned.

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