September 25, 2007

The December S&P 500 is trading at it's 8 day avg of 1523. If it trades below that number for more than one hour, you could see a day of heavy selling down to its 50 day avg at 1495.26.
LVS and WYNN continue to go straight up. Either business in Maccau is better than anybody ever thought, or they are merging, or a third party is buying both companies, or its the short squeeze of the year! Hard to say where it will stop, but I would keep buying the dips, until it closes down on the day.
CROX broke out yesterday and is continuing this morning, and should be a good buy on dips.
LEN reported poor earnings and is continuing to sell off. The whole group should be a short on rallies.
There are five seondaries today: BTRX priced at $5.75, USU priced at $9.76, CNQR priced at $28.50, SPF priced at $7, and QMAR priced at $18.90.
Here are some of the news related trading ideas for today:
QCOM raises Q4 EPS guidance
Gapping up on strong earnings/guidance: KRSL +13.4%... S&P announces changes to U.S. Indices; the following stocks are gapping up after being added to the S&P 500: EXPE +6.1%, TSO +3.4%, ICE +3.3%... Chinese telecom stocks are up with reports that China will soon issue 3G licenses, and a separate report that the govt will overhaul the telecommunication industry: CHA +6.3%, CHU +2.1%, CHL +1.6%... Other news: SCON +24.2% (signs term sheet for joint venture with Hunchun BaoLi Communication), FMCN +9.7% (files delayed Form 20-F; co completed previously disclosed investigation), AKNS +9.6% (co partners with STP to manufacture new solar panel; see yesterday's New High Profile comment for background on AKNS), VCLK +6.4% (Jon Najarian on CNBC highlights recent call buying and takeover rumors in VCLK), CDS +5.8% (announces that its subsidiary Jinwei Magnesium has commenced the production of magnesium at its new manufacturing facilities; see yesterday's profile for more information on CDS), TGB +3.1% (announces positive feasibility study for prosperity project), ARNA +2.4% (announces 'Positive' Phase 2 clinical trial results of APD125 for the treatment of insomnia).
Gapping down: CEA -14.7%, HOV -6.7%, LEN -6.5%, LOW -6.1%, MXIM -4.9%, GOLD -4.7%, TGT -4.3%, RTP -4.3%, AAUK -3.8%, LMC -2.9%, RYL -2.9%, KBH -2.9%.
InterActive upgraded to Buy from Neutral at Merrill (28.14 )
Arena Pharm announces 'Positive' Phase 2 clinical trial results of APD125 for the treatment of insomnia (11.72 )

September 19, 2007

Yesterday I wrote that there would be several false moves after the Fed announcement. Obviously, that was incorrect as the Market went straight up after 2:15 with no pullbacks. If you did not buy in the first move up, it was hard to buy later. This morning we are getting some follow through in both the S&P and the Nasdaq 100. Both indices are now very overbought, although you may not see any selling today. As long as the Market stays positive, you can buy the dips.
Oct Crude has gone up almost every day since August 22nd when it was $69. It has been overbought on the daily chart since Labor day, so its difficult to say when you could see some selling. The 8 day avg is $79.87, so it could pull back to there, but I would only buy the dips.
LVS and WYNN keep going up and both stocks look like they are being acquired. Look to buy pullbacks.
LEH reported yesterday better than expected, and MS reported this morning worse than expected. BSC was negative all day until the Fed announcement, so that may be a short this morning if it gaps up.
There is one secondary today: EGLE priced at $25.90
Here are some of the news related trading ideas for today:
Fannie Mae Regulator to relax limit on investment growth cap, will allow 2% annual growth, according to sources - Reuters (62.54 )
Bernstein initaites select Oil stocks, the firm initiates Weatherford (WFT) with an Outperform and an $84 tgt. The firm also initiates Baker Hughes (BHI), Halliburton (HAL), and Schlumberger (SLB) with Market Performs
Gapping up on strong earnings/guidance: NTWK +42.0%, DBRN +4.0%... M&A: KWD +35.1% (announces receipt of non-binding proposal from Sun Capital Securities, to acquire co for $21/share), RNVS +27.4% (Renovis to be acquired by Evotec in a stock-for-stock transaction valued at approximately US$151.8 mln), LEND +17.8% (co and Lone Star agree to acquire $11.75 per share acquisition price)... European banks are strong following rate cuts in the US and strength overseas: DB +2.3%, CS +1.0%, UBS +1.6%... Other news: INTX +11.3% (upgraded to Strong Buy at JMP Securities), TS +3.4% (trading higher on speculation of bid by ArcelorMittal).
VMware tgt raised to $89 from $74 at Jefferies (73.90 )
Apple's cheap-to-build Nano - BusinessWeek (140.92 )
Gapping down: BOBJ -2.8%, LFC -2.2%, VOD -1.8%, FTE -1.7%, SNDA -1.9%
Morgan Stanley misses by $0.16 (68.51 )

September 18, 2007

The PPI was less than expected giving the futures a boost at the open. However, the Market will go sideways all day untill the Fed Report at 2:15PM. Everybody is expecting a 1/4 point rate decrease in Fed Funds and maybe up to 1/2 point in the Discount Rate. However, that is already baked in to the market and the only thing that matters is the statement after the actions. That will dictate the direction of the Market the rest of the week. Look for a few head fakes before the trend is established, so think before you jump.
There are two secondaries today: HPY priced at $26.34, and LNOP priced at $18.85.
LEH reported better than expected, so look for short covering in the whole group especially GS and BSC.
If you like to play the flyers, BIDU is on a tremendous run, and should be a buy on pullbacks.
Both LVS and WYNN are on fire, and should be bought on pullbacks.
Here are some of the news related trading ideas for today:
Apple: O2 launch of 2G iPhone for 4Q07 as anticipated - Cowen (138.41 )
Kroger beats by $0.04; raises FY08 EPS guidance (27.02 )
Gapping up on strong earnings/guidance: LEH +5.4% (other financials up in sympathy include BSC +2.0%, MS +1.7%, GS +1.2%, MER +1.0%), ADBE +4.8%, BBY +4.4%... M&A: FCPO +101% (to be acquired for $16.50 per share by AAH Holdings)... Other news: MLNM +12.4% (announces Phase III clinical trial in newly diagnosed multiple myeloma stopped early due to highly significant efficacy advantage of Velcade), MOVE +9.8% (authorizes $50 mln stock repurchase program), ASTI +6.1% (co and Hydro Building Systems to launch Brise Soleil product line), BCS +3.5% (Northern Rock shares rallied in Europe after the British Govt guaranteed all deposits), WEN +3.1% (WSJ reports that potential buyers are lining up), MT +2.9% (Nippon Steel may conclude Arcelor alliance talks in November - Bloomberg.com).
Gapping down: MEND -19.0%, NFI -15.3%, NXG -10.1%, ETFC -6.8%, LEND -2.8%, CELG -2.2%, TWX -1.2%, GSK -1.0%.
Las Vegas Sands tgt raised to $145 at Stifel; Y07 and Y08 ests raised (125.60 )
Lehman Brothers beats by $0.07, reports in line revs (58.62 )
Blue Coat tgt raised to $101 from $94 at ThinkEquity (82.63 )
Apple: Continue to believe AAPL is on track to meet 3.9 mln iPhone est- Cross Research (138.41 )

September 17, 2007

The Dec S&P 500 has resitance at its 50 avg at 1498.37. If we can trade above that level for more than one hour, you see a move up on heavy volume.
Here are some of the news related trading ideas for today:
Foster Wheeler and Praxair form alliance to pursue clean coal demonstration projects (127.48 )
Garmin tgt raised to $120 from $100 at CIBC (106.86 )
Gapping up on strong earnings/guidance: RMBS +3.4% (co filed 2006 financial statements on Friday after the close)... M&A-related news: BOBJ +7.5% (Reuters reports BOBJ is looking for a buyer, and has hired GS to find an investor), EDO +6.6% (to be acquired by ITT for $56/share), INSP +5.7% (IAR acquires Switchboard.com and other directory assets from INSP)... Other news: CTDC +18.3% (announces acquisition of all solar energy related assets of Shenzhen Soyin Electrical Appliance Industrial), SMBL +9.9% (mentioned positively in Barron's), CSUN +6.3% (announces supply agreement with a Taiwan based wafer provider), NFLX +5.5% (upgraded to Overweight at Thomas Weisel), CHINA +4.1% (co re-opened its trading window, disclosing 916K shares in repurchases since 9/7), TASR +3.0% (receives follow-on order from France for 1,249 TASER X26 electronic control devices), BRCD +3.0% (upgraded to Buy at Citigroup), NOK +2.3% (upgraded to Overweight at HSBC), F +1.4% (upgraded to Outperform at Bear Stearns).
VMware: Cowen believes VMW embeds overly optimistic long-term growth trends and likely implies significant upside to near-term ests (77.92 )
Gapping down: IRBT -11.5%, BCS -3.8%, ALU -3.7%, RTP -2.8%, MT -2.5%, VMW -2.5%, DB -2.0%, BHP -1.9%, LEH -2.7%.
Sunpower signs Solar America Initiative agreement with U.S. Department of Energy (74.44 )
BEA Systems: Jefferies comments on Icahn filing calling for sale; firm's analysis indicates a strategic value of $15.50-17.50. (13.30 )
LDK Solar profiled in New America section of IBD (55.55 )
JP Morgan upgrades Advanced Micro Devices (AMD 12.69) to Neutral from Underweight

September 11, 2007

The Market reversed yesterday setting a higher low, so if we hold that low, the Market should be a buy on every dip. The 8 day avg in the Sept S&P 500 is over head resistance at 1469.78. The Sept. Nasdaq 100 8 day avg is 1989.75, also resistance.
IMCL is up big which could lead the biotechs higher.
The good news from INTC yesterday should lead the SMH higher again today. The 50 day avg is $38.24, so if it can get through there, look for another leg up.
Oct Crude made a new contract high yesterday and then sold off. So far its holding its 8 day avg at $75.79, so as long as it closes above that level, it should be a buy on dips.
CFC says it need to refinance! The stock looks very weak and could be in for a punishing session.
There is one secondary so far today: EXEL priced at $10.40 (GS deal).
Here are some of the news related trading ideas for today:
SL Green Rlty downgraded to Outperform from Strong Buy at Raymond James (101.61 )
Gapping up on strong earnings/guidance: TTWO +6.5%, CMVT +5.8%, WDC +4.4%, DLLR +3.9%... M&A: URGI +77.5% (to be acquired by Redcats for $13.70 per share)... Other news: IMCL +27.2% (Erbitux meets primary endpoint of increasing survival in Phase III lung cancer study), NABI +19.7% (announces sale of Nabio Biologics to Biotest), ARNA +7.0% (announces an independent Echocardiographic Data Safety Monitoring Board found no reason to stop ongoing Phase 3 trial BLOOM), ACH +6.5% (tgt upped by 23% to HK$15 at Deutsche), PKX +4.9% (co dropped a plan to buy a stake in a Chinese coal company), ERIC +4.6% (co reiterated its handset forecast ahead of the co's 'strategy day'), LOCM +3.9% (still checking for any news), TMA +3.7% (upgraded to Buy at UBS), LSI +3.6% (upgraded to Buy at Deutsche Bank).
Alum. Corp China tgt upped at Deutsche Bank - Bloomberg.com (60.78 )
Gapping down: BRLC -11.0%, EXEL -6.5%, SHFL -5.4%, CFC -4.6%, SMOD -4.1%, DNA -3.7%, GOLD -1.1%.
UBS upgraded TMA to Buy from Neutral and lowered the tgt to $18 from $27, as they say the worst looks to be over. They say the upgrade is primarily based on their longer-term view that the credit markets will eventually stabilize for low-credit risk assets such as AAA-rated jumbo prime mortgages. Barring further credit mkt deterioration, they believe the recent management actions have mitigated further BVPS decline & margin calls, and improved their '08 outlook.

September 5, 2007

The market levitated all day except for the last half hour. That sell off is continuing into this morning. There will probably be a small bounce at the open, but I would be hesitant to buy the down opening. If the Sept S&P 500 holds its 8 day avg at 1470, that would be a good place to enter on the long side. The cash S&P 500 closed just above its 50 DAY Avg at 1487.73, which will be resistance this morning.
Oct Crude was very strong but is overbought on the daily chart and needs to consolidate. There may be some profit taking in front of the inventory numbers tomorrow. If so the OIH could pull back to its 8 and 50 day avg at $175.70.
KSS was very weak yesterday and may break down today.
LEAP was a great short at the open, and then a buy the rest of the day. It should be a buy on dips again today.
CHS was a good short last weak and came out with bad news today and should be a short again.
NFI looks like it is going out of business. If you can borrow the stock, stay short.
Here are some of the news related trading ideas for today:
National Semi: AmTech revises ests up slightly ahead of quarter; aggressive buyers in the mid 20s (26.83 )
Nordstrom CFO says no changes in customer shopping trends from credit market turmoil - Reuters (46.98 )
KFT sees FY07 EPS of $1.80-$1.82 (vs ($1.80 consensus), up from $1.75-$1.80
Gapping up on strong earnings/guidance: XING +10.6%, MIND +7.7%... M&A: APLX +21.1% (to be acquired by COGN for $17.87/share)... A number of biotech stocks are gapping up on news this morning, and seeing follow through on strength in the group yesterday: PARD +16.3% (receives FDA fast track designation for picoplatin for treatment of small cell lung cancer), SLXP +14.8% (announces statistically significant top-line results from study in ulcerative colitis), DEPO +9.7% (announces positive results of Phase 2a proof-of-concept GERD study), NFLD +5.7% (continued strength after yesterday's 70%+ move), DYAX +4.0% (Dyax and Bayer Schering Pharma enter into a collaboration agreement for discovery of therapeutic antibodies), AMGN +3.2% (Senate and House of Representatives passed an N.C.D. Resolution -- this morning Deutsche Bank said it was a "major positive")... Other news: VCLK +2.5% (last night Yahoo acquired ad network co BlueLithium -- this morning there has been mixed analyst commentary regarding the impact on VCLK).
Gapping down: FNSR -10.1%, OSIS -10.0%, RDN -7.8%, AGIX -7.7%, GES -7.3%, SCMR -5.9%, COST -5.9%, ABB -3.5%, ACGY -2.4%.
Diamond Offshore: Friedman Billings cuts ests following fleet status report (108.22 )
ConocoPhillips downgraded to Market Perform from Outperform at Bernstein (83.48 )
OSI Systems reports Q4 results; guides Q1 & FY08 below consensus (25.56 )
MGIC Investment and Radian Group terminate merger (30.34 )

September 4, 2007

Volume should pick up this week as all the players return. The Sept S&P has resistance in the 1484 area and above that is its 50 day avg at 1493.62. The Sept Nasdaq 100 is stronger and should lead any rally. The 50 day avg is support at 1974.31. Resistance would be at the previous high of 2006.75.
With Hurricane Felix hitting Central America, October Crude should sell off down to its 50 day avg at $72.84, below that is its 8 day avg at $72.37. The OIH should also pull back to $175.57.
Watch GS, BSC and JPM for a direction on the general market.
Here are some of the news related trading ideas for today:
Gapping up on M&A related news: ASTSF +23.3% (to be acquired by ASX for $14.78 per share), LEAP +11.7% (PCS proposes stock-for-stock merger under which each LEAP share would be exchanged for 2.75 shares of PCS stock)... Other news: LOCM +17.0% (renews search marketing distribution relationship with YHOO), VIAC +12.0% (announces ViaCyte collaboration with EMD Serono), CREE +10.4% (continued momentum following Friday's 10%+ move that was attributed to takeover chatter), HLTH +6.6% (Friday's unusual call buying was highlighted by Jon Najarian on CNBC this morning -- see OPTNX archive for further color on Friday's options activity), HOKU +5.9% (upgraded to Market Perform at Piper Jaffray), TMA +5.7% (announced the completion of a collateralized mortgage debt transaction collateralized by $1.44 bln of the co's prime hybrid ARM loans), CFSG +4.2% (announces $7 mln contract wins; issues in-line Y07 guidance), ANO +3.8% (announces that it and AAUK entered into a detailed transaction framework agreement), LLNW +3.4% (announces its content delivery technology has been adopted for PlayStation3 and PSP system software updates).
Yahoo! named top pick at Bear Stearns (22.73 ) Yahoo! was named the top pick at Bear Stearns. They believe that there are several catalysts that could drive Yahoo!'s shares, including: 1) success from branding initiatives, 2) good results from Panama, 3) takeover / strategic partnership talks, 4) the Alibaba IPO, and 6) a material share repurchase. They believe that Microsoft (MSFT) continues to evaluate YHOO as a target.
Sunpower: Cowen believes SPWR is one of the best-positioned solar pv plays (68.33 )
Gapping down: WFR -3.6%, PSPT -2.8%, BMY -2.2%, RIMM -2.0%, LEND -1.7%, ABB -1.6%, MNST -1.5%.
Applied Materials: Friedman Billings believes AMAT will start to recognize solar-related bookings sooner than expected (21.36 )
Deere tgt raised to $160 at Credit Suisse; FY08 ests raised (136.06 )
Bear Stearns downgraded RIMM to Peer Perform from Outperform, but raised their fair value est to $81 from $76, based on valuation. Also, while firm has not seen any signs of slowing demand, they think RIMM could one of the first to be affected by macro-related demand issues given its high exposure to enterprise (75-80% of sales).
HOKU Scientific upgraded to Market Perform from Underperform at Piper Jaffray (9.09 )
Tyco upgraded to Buy from Hold at Deutsche Bank- tgt $52 (44.16 )