Tag Archives: CNBC

Stock Market Watch for Wednesday April 08, 2009

Tuesday’s Market Recap:  Stocks fell for second day in a row.  Traders, bracing for a grim earning season, took some profit off the table from the mammoth rally in stocks for 4 consecutive weeks.  There were no major events that could have pushed the markets up.  The trading volume was very light, just as on Monday.

The Dow lost 186 points or 2.3% to 7790, and the S&P 500 was down 20 points or 2.4%, at 816. The Nasdaqshed 45 points or 2.8%, to 1562.  The losses were broad based.  Only 2 Dow members ended positive for the day, and about 90% of S&P components ended the day in red.  Commodities trading was mixed.  Crude closed at $49.28 per barrel, down 3.5%. In contrast, Gold rose $10.10 or 1.2% higher to close at $883.30 per ounce.

TaurusTrader portfolio had a mixed day. Position in WFC was stopped out for 8.4% loss. If you remember, TaurusTrader still has a small position inWFC, which was bought @ $13.75, a couple of days earlier. At the end of the day, the portfolio had 12 positions – WNR, AGU, AMR, FCN, HON, HSP, WDC, TNA, EXP, FMX, CMED, andOMTR. And, small positions in WFC and MS. BCE andRRC are still on the focus list, but have not hit the ‘buy limit’.

Market Watch for Wednesday, April 08:  The Dow component Alcoa (AA) unveiled its latest quarterly result, thus kicking off the new earning season.  AA reported a loss of 59 cents a share, about 3 cents worse than the estimate, but the revenue came in slightly ahead of consensus.  AA Shares were slightly lower (about 1.5%) in after hour trading. 

On the retail front, the home goods store, BBBY also reported after the markets closed today and topped the estimates.  Consequently, BBBY shares were trading up over 12% in the after hour trading.

However, the ag fertilizer giant MOS provided a dismal report.  The net income of MOS fell 88%  due to rising materials costs and falling sales volumes.  The company also warned potash sales would continue to be weak in the fourth quarter.  MOS shares fell about 6%  late trading. 

There was a lot of optimism around MOS.  If you had recently watched Fast Money on CNBC, you know what I mean!  However, if you were a regular reader of this blog, you probably were not surprised by the poor quarter by MOS.  In my blog on April 1, while talking about DE, I said ” ….. In fact,  …… there was a newly released negative USDA report that could potentially impact fertilizer and ag equipment stocks. US farmers will be planting more soybean acres, a crop that requires less fertilizer and equipment utilization compared to corn …….”.  So, you were warned ahead of time! 

Ag and fertilizer stocks will be affected tomorrow in sympathy with MOS.  I’ll watch our AGU position carefully, even though AGU is not similar to MOS in its business dealings.  AGU makes bulk of its revenue in selling and distributing seeds, ag chemicals, and nitrogen fertilizer.  And, it reported a stellar quarter a few days ago.

So, it should be a interesting day of trading on Wednesday.  The earning reports discussed above may have some impact on overall market at the open, but probably a minimal impact toward the close.  Again, for the quarter in general, the  expectations are very low, and nobody expects the first quarter earnings to be good. Companies were conservative and lowered their expectations substantially. Very few have warned recently. This could mean that there may be relatively few negative surprises.

Potential market moving events on Wednesday are – 1) Federal Reserve will release its March meeting minutes, which should provide more details on the state of the economy. Also, 2) SEC is expected to discuss proposals related to the re-institution of the uptick rule for shorting stocks.

TaurusTrader swing portfolio is long in 12 positions and is well diversified.  I do not want to add any new position at this time of market uncertainty.  However, I will watch my positions closely with tight stops.

If there are questions or comments, please do post ….

Happy trading …

Best regards,

TaurusTrader

http://www.taurustrader.wordpress.com

Advertisements

Stocks to Watch for Friday April 3, 2009

Thursday’s market recap: Another great day!  Even though it could not hold on to it  at close,  Dow breached 8000 mark for the first time since Febrauary 9.  Nasdaq is now positive for the year!  S&P somehow managed to hold above the critical 833 support level.

The Dow gained 216 or 2.8%, to close at 7978.  It had earlier gained as much as 314 points.  The S&P index gained 23 points or 2.9%, to end the day at 834. The Nasdaq rose 51 points or 3.3%  to close at 1603.

Crude rose $4.25 to settle at $52.64 a barrel, while gold fell $18.80 to $908.90 an ounce.

Traders were in buying mood.   Markets opened up nicely in the morning despite some negative data on jobless claims.  There were again small doses of good data that helped.  Banking sector had a some relief with FASB’s decision to relax mark to market rule on toxic assets.  Markets also liked the news coming out of G-20 meeting in London of heads of states.  G-20 leaders decided to fund IMF over $1 trillion to help troubled nations around the world, and also agreed to formulate stricter global regulation of financial institutions.  ECB lowered interest rate by 0.25%, to bring the rate down to 1.25%.  Factory orders posted a larger increase in February.  This news came on the heels of yesterday’s better than expected data on pending home sales, manufacturing activity and auto sales.

TaurusTrader’s swing portfolio had a nice day.  All 4 of yesterday’s picks – EXP, WDC, HSP, and TNA, were bought, and had decent  gains.

Focus list for Friday, April 3: There are signs to support that this rally may have more ‘juice’ left in the tank to run.  As I said in my earlier posts, small doses of good news have started coming in indicating that this recession has started to recede.  Benefits from innovative plans, at least some, put forth by the new administration appear to slowly seeping in to the economy.   CNBC’s Bob Pisani observed that mutual funds are getting back to the market to scoop up stocks.   Commodity prices are going up.  Copper just made a new 5-month high.  Copper is a good indicator of economic growth.  Similarly the transportation index, which went on a tear today!   I also expect that the Banking stocks to continue their momentum following the boost they got from Thursday’s favorable mark to market ruling by FASB.  RIMM reported exceptional quarter after Thursday’s close, and was up over 20% in aftermarket hours.  Folks, these are some good signs ….

However, we can’t let our guard down.   The optimism could be easily crushed if tomorrow’s jobs report surprise us with lousier than lousy expected data.  Economists predict  a loss of 654 K jobs in March, and unemployment rate  to rise to 8.5%,  from 8.1%  in February.

TaurusTrader swing portfolio picks for tomorrow, Friday April 3 are:

  1. FMX – Buy above $27.08, stop at $24.90, target $30.60
  2. BCE – Buy above $21.77, stop at $19.90, target $24.50
  3. WFC – Buy above $16.26, stop at $14.90, target $19.00

There are no day trade picks for Friday.

Please follow all trades with protective stops. The markets  may be kind to you,  but  it can turn against you any time unexpectedly!

Good luck trading.

TaurusTrader

http://www.taurustrader.wordpress.com

Stocks to Watch for Friday, March 27, 2009

Thursday’s Recap:  Another great day at the market!  All three major indices finished solidly positive.  Dow ended the day up 175 points to its highest level in six weeks.  Dow has gained nearly 21% since close to hitting a 12-year low on March 9.  Nasdaq has now erased all losses for 2009 and is now back in black.  AMAZING!  Dow, however is still down 9.7% for the year.

Mainly 3 factors contributed to today’s rally. 1) Better than expected earnings and future guidance by retail giant BBY, food processor CAG, and soft drink company DPS – relaying the fact that the consumer spending is still intact, 2) Contrary to yesterday’s disappointing auction, today’s auctioning on long term debt was received with enthusiasm, lifting the fear  about the government’s ability to fund its economic stimulus and financial bailout programs, and 3) shorts got squeezed and forced to cover some of their positions.  Stocks have been aggressively shorted during the market decline  and the short interest had risen 11% by mid March.  Enormous amount of sideline money is slowly venturing to get back in to the buying mode.

Economic data (GDP and unemployment) were not great, but the numbers came within forecast.  Hence, did not have major impact on markets. Tim Geithner appeared very confident and handled questions with ease in his testimony to the house finance committee.  Markets and for that matter the congress, are becoming comfortable with our new treasury secretary.

When the closing bell rang, the Dow had gained 175 or 2.3% for the day and it closed at 7925, its highest close since February 12.   The S&P500 index rose 19 points or 2.3%, to 833, and the Nasdaq rose 58 points or 3.8%, to 1587.  Gold prices also rose modestly.  Oil reached a new high for the year, settling up $1.58 at $54.34 a barrel.

Today’s gains were widespread as all 10 major sectors in the S&P 500 closed the session higher. Contrary to recent form, the gains came without leadership from the financial sector.   The dollar is stabilizing and it rose marginally against other major currencies.  This brings to the comments I made last Thursday, when dollar took a dive after fed announced a trillion dollar infusion to bolster economy.  Here is what I said: 

Is Dollar Worry Over Blown? –  ……. In my opinion, the dollar related reaction to fed decision is a little over done.  US economy is still the strongest economy in the world despite all our problems.  Dollar is still the dominant currency.  People who are squabbling over greenback, should just look back a little.  Just 6 months ago, EUR/USD pair was trading at over 1.60.  Now, when it jumped from 1.30 to 1.35 or so, all hell breaks loose!  ………………………  So, relax folks.  A slight decline in dollar is not the end of the world as the dooms day pundits like Larry Kudlow and his friends on CNBC rant about.  The dollar is already stabilizing against the Euro and Yen as I write this blog around mid night.

That was last Thursday …. Friends, how true that statement turned out to be.  … PATIENCE …. Patience is what we need to navigate this market.  Do your home work and do not be swayed by hype!!

TaurusTrader swing portfolio had a superb day.  MELI was closed out for 13.5% profit in two days.  All positions, except BAC advanced.  TCK. MBT and WNR are very close to hitting their profit target. 

It was not a bad day for day trading.   There were opportunities to trade for 3 to 5% profit with  TNA.  Rest of the picks did not pan out well.  As discussed before, I use 10-min chart to determine entry and exit points.

Picks for Friday, March 27:  President Obama and Treasury Secretary Geithner will be meeting with banking industry CEOs to discuss on banking crisis, bailout money, toxic assets, and regulations, etc.  Any post meeting snippets from participants may have some impact on financial sector stocks.  Friday’s economic data releases include, Personal Income ( Expected: -0.2%), Personal Spending (Expected: +0.3%), and U Mich Sentiment Index (Expected: 57). 

Even though I’m very tempted, I do not want to add any new position to swing portfolio.  The current portfolio of 11 stocks is well diversified, and a few positions are very close to hitting profit target.  So, I’ll wait till next Monday or Tuesday to add new positions.

For day trading, I’ll focus on financial, technology, energy, ag and commodity sectors for trading opportunities.  Some of the specific stocks that I would be following are – FAS, TNA, DUG, MOS, and JOYG.

If there are questions or comments, please do post. 

If you are interested in receiving my posts directly via email, please email me at –  TAURUSTRADER@SBCGLOBAL.NET  or click on the ‘comments’ below to request.  I can do the rest!!

Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

Stocks to Focus for Friday, March 20, 2009

Thursday’s Recap:  Rally faltered a little bit.  Markets declined for only the 2nd time in 8 days.  Financials lost steam and took the major averages down.  It is probably a good thing.  Banking sector had gone up too far, too fast.   XLF has been up over 60% in less than 2 weeks.  Some cool off was overdue.  XLF ended the day losing about 8%. 

Dow shed almost all the gains it made yesterday by losing 86 points or 1.2%, and closed at 7401.  Nasdaq lost 0.52% or 7.74 points to close at 1483.5, while the S&P 500 declined by 1.3% or 10.3 points to 784.

So, technically speaking…. looks like 50 day MA is the Achilles heel for major averages to overcome.

All three indices are at technically interesting juncture. Dow is 220 points away from its 50 day MA, which it has not crossed since January 7. Dow came very close to taking out 50 DMA on February 9, but it was flatly rejected. S&P has breached 50 day MA for two consecutive days now, but could not close above it.  S&P also has not closed above 50 DMA since January 6th.   Current 50 DMA for S&P stands at 794,  just 10 points away from today’s close.

Nasdaq has however, closed above 50 day MA for 2 consecutive days now.  But,  is barely above (by 22 points) the 50 DMA (1461).   It would be interesting to see whether Nasdaq would be able to hold above its 50 day MA in the next couple of days.

Is Dollar Worry Over Blown? – There were renewed worries about the greenback following yesterday’s fed decision to spend another trillion dollars to bolster economy.  Dollar declined against major currencies for 2 session in a row since then.  Dollar lost 4% against Euro in less than 24 hours.  That’s a big move.  This led to a bounce in commodities and commodity related stocks in today’s trading.  The CRB Commodity Index rose more than 5% (largest single-session advance by percent this year). Crude oil gained 6.5% to close at $51.25 per barrel.  Gold advanced by 7.8% to close at $958.50 per ounce.  Energy stocks (+1.4%) and materials stocks (+1.4%) also rose. 

In my opinion, the dollar related reaction to fed decision is a little over done.  US economy is still the strongest economy in the world despite all our problems.  Dollar is still the dominant currency.  People who are squabbling over greenback, should just look back a little.  Just 6 months ago, EUR/USD pair was trading at over 1.60.  Now, when it jumped from 1.30 to 1.35 or so, all hell breaks loose!  Very strong dollar in the past few months had hurt US companies doing business abroad.  An example is ORCL, which reported a great quarter yesterday.  ORCL beat the street estimate by 2 cents.  Still, ORCL numbers would have been 5 cents better if it were not for a stronger dollar.  So, relax folks.  A slight decline in dollar is not the end of the world as the dooms day pundits like Larry Kudlow and his friends on CNBC rant about.  The dollar is already stabilizing against the Euro and Yen as I write this blog around mid night.

TaurusTrader swing portfolio had a decent day.  AGU and TCK were bought and added to the portfolio.  None were stopped out.  Today’s gainers include – AGU, TCK, BX, MDR, CPRT, +WDCDV, BX, BMC, and WMS.  Stocks – MBT, WNR, and RY shot up at the open, but lost steam later in the day ending in red, along with AMR and FCN.  CPRT, RY and MBT came within just a few cents of hitting the target before retracing!!!

It was just one of those very rare days that I could not find a decent trading setup to day trade!  It is better NOT to trade when there are no trades to be made with confidence!!

Picks for Friday, March 20:  It is a tripple witching day for options.  Expect a very choppy session and the stocks to trade in a wide range.  I do not want risk picking any stock to go long at this kind of market condition.  However, I do want to ‘day trade’ precisely at this kind of market condition, and exploit the market volatility . 

I’ll focus on financial, energy, ag and commodity sectors for trading opportunities.  Some of the specific stocks that would be following are – FAS, WFC, MS, TNA, DIG, DUG, IPI,  AGU, and JOYG.

If there are questions or comments, please do post. 

If you are interested in receiving my posts directly via email, please email me at –  TAURUSTRADER@SBCGLOBAL.NET  or click on the ‘comments’ below to request.  I can do the rest!!

Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

Why WFC is down today???

Attention to the following article om MarketWatch. Is WFC being punished by the traders (CNBC followers?). WFC was up in the morning, now it is down close to 15%. Wall street and the CNBC crowd needs to quit whining, kicking and screaming about each and every policy of the new administration. It needs to grow up. Read on …

Please don’t flame me …. it’s just a thought! 

I know there are other reasons for WFC’s (as well as JPM) decline today.  Street is not happy with that WFC is doling out hefty dividend (0.34/share).  Street wants WFC to cut dividend like JPM.  The rotten and inept rating agencies are warning that they might downgrade WFC’s debt.  Shorts are targeting somewhat healthy banks now after taking down C, and BAC …. WFC is their next target …. JPM is after that …. so on so forth, until all the big banks are gone!  Just look at heavy out of the money put options and their premiums. 

TaurusTrader

http://www.taurustrader.wordpress.com

 

Wells Fargo declines the tea party11:39a ET March 4, 2009 (MarketWatch)
NEW YORK (MarketWatch) — The administration’s mortgage plan got a huge endorsement Wednesday when Wells Fargo & Co. announced it will offer the government’s terms to homeowners who qualify.

In short, Wells Fargo and its chief executive, John Stumpf, are embracing a plan sympathetic to Americans struggling with mortgage debt, and the bank is shunning so-called populist “tea parties” who say responsible Americans are paying for the bailout.

The Obama plan has come under intense criticism from many observers, including an unusual suspect: CNBC’s Rick Santelli, whose Feb. 19 rant against the plan was viewed 2 million times on the network’s Web site and another 855,000 times on YouTube.

The endorsement by San Francisco-based Wells Fargo is significant for a few reasons. For one, the bank is facing huge defaults in the mortgage portfolio it acquired when it bought Wachovia Corp. If the bank had a better plan, it would be reluctant to participate in the White House’s strategy.

“It helps customers facing true financial hardshipswhile guarding against moral hazard,” said Mike Heid, the co-president of Wells Fargo Home Mortgage, in a statement.

Then there’s the bank’s scale in the business. Wells Fargo services one of every seven mortgages in the U.S. market and is the second-biggest mortgage servicer in the nation.

Unlike mortgage moratoriums and other leniency programs that have a limited effect, the availability of restructured mortgages may keep more people in their homes. It’s also good business when banks don’t have to foreclose on properties that can’t readily sell.

Is the plan perfect? Absolutely not. Some homeowners will take advantage of the system. But banks recognize something must be done. Failure is not an option.

– David Weidner

Stocks to Focus for Friday, 02-27-2009

Thursday’s Recap – It was a tale of two halves.  Morning session was full of excitement, anticipation, and hope – hope for a reversal.   Markets ignored some very dismal economic numbers.  It was just ready to rally.  It even liked President Obama’s roll out of enormous budget, for about an hour or so.  I even sent out a blog about it in surprise (The President Speaks …. Markets didn’t Panic!!!).  It was all rosy ….

Then it was my fault …. I tuned in to CNBC.  Oh my!!.  There was panic and pandemonium in the studio.  The ‘know-it-all’ all powerful market experts of CNBC were ranting, raving,  arguing emotionally, and throwing sensational tag lines like ‘revolt of the rich’,  ‘class warfare’, ‘war against the wealthy’, etc etc etc.  They were picking apart the budget proposal.  It must have scared the heck out of every living being watching CNBC.   The markets started drifting between positive and negative territories, and firmly ending in solid red.   I may be off a little bit, but it sure looked like the talking heads of CNBC had more clout on the market than the President!!  Dow closed at 7182, shaved 88.8 points or 1.2% .  It was over a 200 point negative turn about for Dow.  Nasdaq was even worse, losing 34 points or -2.4% to close at 1391.5.  S&P was chopped by 12.1 points or -1.6%  to close at 752.83.  S&P is about 11 points shy of November 21, 2008 low of 741.02.  S&P came just within a point of breaking this low on Monday.  It is very critical that S&P hold this low tomorrow and close out horrendous February. 

I’m not completely happy with every thing in the budget either.  But, there are some items in there that can do this country good immediately as well as in the long run.  Some sectors benefit, while there is pain for certain sectors of the market because of dramatic shift in focus.  Health care, drug, and student lending stocks took a beating.  Some of these stocks are down 30 to 40% in the past couple of days (eg. HUM, UNH, SLM, STU). 

TaurusTrader portfolio had a mixed day.  We got stopped out of DRI (-8.1% loss).  Rest of the stocks either had a slight loss or a slight profit for the day.  We were not able to add ADM and SVR which again failed to hit ‘entry limit’.  Based on my criteria (a pick is dropped if it is not filled in 3 days), I’m dropping SVR from my ‘add’ list.   

Picks for Friday, February 27  – It is the last trading day in February, and markets are bracing for worst monthly close in several years.  Markets are running on ‘ raw emotions’, and I’m looking for some sanity to return.  We need some clarity from DC, not just media events by the President.   We still do not have a clear idea on what this administration intends to do to stabilize  troubled banking sector.  Tim Geithner’s ‘stress test’ for banks is ‘stressing’ investors out of patience.  The government’s involvement  is seeping in to trading, and that is not good.  Billions of market wealth is being lost.  I hope this administration is going to realize it soon, and back off from injecting too much politics in to market.

I do not have any picks for Friday.  However, as in the past couple of days,  I’ll keep an eye on the financials – BAC, MS and WFC, for quick day trade opportunity.  If the crude trades up by over a dollar, I may also be interested in looking at – MON, SYT, IPI, HP, and SU.   I do not want to risk holding any new stocks over the weekend though.

TaurusTrader portfolio currently holds – CMG, UYG, ATHN, BMC, PBR, and MELI. 

If there are comments or questions, please do post ….

Good luck trading.

TaurusTrader

https://taurustrader.wordpress.com