Tag Archives: Monday’s market recap

Market Watch and Stocks to Focus for Tuesday – April 07, 2009

Monday’s Market Recap:  Stocks started the week in red on bearish analyst comments and break down in talks on $7 billion takeover offer by IBM for Sun Micro (JAVA).  

Influential banking analyst, and a known banking sector “bear”, Mike Mayo of Calyon Securities cursed the banking sector, slapping an “underweight” rating.  In his report “Seven Deadly Sins of Banking”, he indicated that the banks would suffer more losses despite the intervention by the federal government. Mayo advised investors to minimize exposure to banks in their portfolio. Similar sentiment was expressed by another ‘bear’ side analyst, Peter Winter of BMO Capital whose concerns were the increasing deterioration in commercial real estate and commercial and industrial loans. On the other hand, another veteran analyst, Dick Bove had a different point of view on Bank of America and the economy.  Bove said in a note to investors that the “economy has turned the corner” and the BAC stock price will ultimately “return to its all-time highs”.  

Adding to the sour note was a downgrade of CSCO by a Goldman Sachs analyst who cut the rating to “neutral” from “buy”.   CSCO dropped 3.5%. 

Markets were able to recoup some losses in the last hour before close.  Shares of defense contractors – NOC, GD, BA, and LMT rose on the heel of announcement by Defence secretary, Mr. Gates of revamped defence budget.  Shares of Ford (F)added 16% after the automaker successfully reduced it’s debt load by 39% or $9.9 billion.  Also, in an interview with CNBC’s Maria Bartiromo, the analyst and the banking sector nemesis – Ms. Meredith Whitney  appeared “less bearish” on banking sector.  She thought the evaluations would go higher because of recent action by FASB (mark to market relaxation), fed support, and cheep credit. This is some great news for banking stocks!!

By close, the Dow gave up 42 points or 0.5%, to close at 7976, and the S&P 500 lost 7 points or 0.8%, to 835. The Nasdaq shed 15 points or 0.9%, to 1607.  The volumes were however low.  

Crude fell $1.46 to settle at $51.05 a barrel, and gold dropped $24.50 to $872.80 an ounce.  The dollar was slightly stronger against the yen and somewhat weaker against the euro and pound.

TaurusTrader swing portfolio had a decent day.  No position was stopped out.  AMR is finally showing some life, and was up over 10%.  Two new positions suggested yesterday, were added – OMTR and CMED.  Two other recommendations, RRC and BCE, are yet to hit target entry price, hence were not bought.

By the end of the day, the TaurusTrader swing portfolio had 13 positions in – WNR, AGU, AMR, FCN, HON, HSP, WDC, TNA, EXP, FMX, WFC, CMED, and OMTR.

Stocks to Focus for Tuesday, April 7:  The market is on edge about the coming parade of first-quarter results.  The earning season kicks off Tuesday with the Dow component Alcoa (AA), ag fertilizer giant MOS, and the home goods retailer BBBY.  Worse-than-expected reports could easily upset the market’s mammoth recent advance. 

Jittery market is also awaiting for clarity on the proposed private-public partnership program to buy toxic assets from banks, and the results from the  “stress test” of major banks.  Also, important on the horizon is the ruling from SEC on the up-tick rule for shorting stocks.

This is short week for trading as the markets will be closed on Friday for observing Good Friday.  So, greater volatility is expected.

I do not have any fresh picks for TaurusTrader swing portfolio for tomorrow.  I’ll follow my positions closely with suggested stops.

BLUD reported a better than expected earning after the markets closed on Monday.  BLUD  beat the street by 5 cents, and also guided modestly above the expected upper range of, $0.97 to 1.02.  If interested, I would suggest buying BLUD above $25.50 and sell it just under 27.00, either as a day trade or overnite swing trade.

As I cautioned in my blog yesterday, if you have gold or gold mining stocks, please watch carefully.  GLD closed just below the important support of 200 day MA. 

Other sectors of interest for tomorrow’s trading are – technology, ag and fertilizer, and financial.

As usual, if there are questions or comments, please do post.

Have a great day ….

Best regards,

TaurusTrader

http://www.taurustrader.wordpress.com

 

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Stocks to Focus for Tuesday, March 31, 2009

Monday’s market Recap: A down day as predicted, but did not expect that it would be so miserable.  All three major indices lost about 3% for the day.  It could have been worse if not for a little rally in the last hour before close!

Dow tumbled 254 points for the day or 3.3%  and closed at 7522.  The S&P fell 28 points or 3.5%, to 788, while the Nasdaq lost 43 points or 2.8%,  to 1,502.  The decline was wide spread.  All 10 sectors and 90% of S&P components ended in red.  Crude lost nearly $4.00 (7.6%) to close at 48.41, and even gold fell by $7.60, to $917.30 an oz.  The dollar however,  gained against most foreign currencies.

Markets were in oversold condition, and needed some excuse to sell off.  An announcement by Obama administration to let GM and Chrysler to go bust, and presumably, Tim Geithmer’s assessment over the weekend that banks may need more federal injection of funds, provided just the pretense to sell off.  In my opinion, nothing had changed from last week to this week with auto makers and the bankers.  This pull back was some what prudent considering that the markets had such historic gains within a short period.  Despite the two-day drop, the Dow is still up 975 points or 14.9%, from its low of 6547 on March 9, when it ended at its worst level since April 1997. The S&P 500 index is also still up 16.4%  from its low.

In TaurusTrader swing portfolio, some positions were stopped out.  We were prepared for this pull back, hence the stops were raised for some volatile positions after the big market run up. Stops were hit with BAC (-12.6%), RIO (-4.9), HNT (-7.3%), MDR (+1.2%), and MBT (+3.9%).  If you remember we had  12 straight winners before this! We won MORE, and lost a FEW … However, above all, we knew exactly how much we would lose, if we lost, and how much we would win, if we won!.  That’s “peace of mind” trading, which comes from discipline and adherence to a set of trading rules.

At the end of the day, TaurusTrader portfolio was left with positions in – FCN, AMR, WNR, AGU, and HON.

I did not day trade.  None of the day trade picks from yesterday worked out for day trading!

Picks for Tuesday, March 31: No major market moving economic events are scheduled, so expect for more volatility and choppiness in the market. Traders will be positioning for jobs and unemployment data to be released later in the week as well as for the official beginning of the 1st quarter earnings season beginning next week.  It is also the last day of the quarter, and some funds might even try to push price of some stocks higher to make their portfolio look good for customers!

Even though I’m very tempted, I do not want to add any new position to swing portfolio.  I’ll wait for another day or two before adding long positions.  Congressional Hearing on Thursday on Mark to market will have significant impact on the markets in general and financial stocks in particular.

For day trading, I’ll reluctantly focus on – FAS or FAZ, DUG or DIG, DGP or DZZ, and  TNA.

If there are questions or comments, please do post.

Happy trading ….

TaurusTrader

http://www.taurustrader.wordpress.com

http://www.headhurts.wordpress.com