S&P 500 1,143.82-.70%
NASDAQ 2,052.14-1.04%
Leading Sectors
HMO's+1.1%
Broadcasting+.1%
Papers-.16%
Lagging Sectors
Airlines-1.84%
Semis-2.2%
Disk Drives-3.67%
Other
Crude Oil 34.3+.79%
Natural Gas 5.55+2.0%
Gold 409.7-1.06%
Market Movers
Dell+3.2% on earnings report and Raymond James upgrade to "Strong Buy".
PEET+10.2% on 4th Q earnings and announced stock buy-back.
PD-3.0% on downgrade to "Market Perform" at BMO Nesbitt and profit-taking.
Mid-day News
Morgan Stanley is upgrading the Electronic Manufacturing Services from "In-Line" to "Attractive". Goldman Sachs is positive on Voice-over-internet-protocol(VOIP) after FCC signaled its intent to minimize regulation of the nascent industry. The CEO of Analog Devices, an electronic device and mobile chipmaker, told CNBC that the broad recovery amongst its industrial customers is in its early stages, as customers are just beginning to add capacity to respond to what they see as much stronger demand. The CEO of Sabre Holdings, whose company owns Travelocity.com, told CNBC travel demand is rapidly improving. The U.S. trade deficit widened to $42.5B in December, above expectations of $40B. U.S. consumer sentiment fell this month to 93.1, below expectations of 103. Bank of America trimmed its sales and earnings estimates for Intel's 1st Q. Dell was raised to "Buy" at Raymond James. The AP said a suspicious powder was found at a post office branch in Jersey City, NJ. The Chicago Sun Times and the Philadelphia Daily News are reporting on the potential John Kerry scandal, however none of the major networks have mentioned it.
BOTTOM LINE: The weakness today is a result of the weaker consumer confidence numbers and multiple terror scares. The drop in cosumer confidence is disappointing, but not surprising after last months sharp spike up. My short-term trading models have now given sell signals, thus I am in the process of cutting my market exposure by selling longs and adding shorts. I will concentrate on the tech sector for potential short candidates. The Portfolio is down today and is currently 60% net long. I would like to take market exposure down to 20% by the end of the day.
Friday, February 13, 2004
Friday Watch
Earnings Announcements
Company/Estimate
ABX/.08
CHINA/.03
NANO/-.15
DP/.51
Splits
None of note
Economic Data
University of Michigan Consumer Confidence is expected to come in at 103.0 versus 103.8 last month. The U.S. Trade Deficit is expected to come in at $40B versus $38B last month.
Late-night News
Rumors are swirling on the net about the possibility of a scandal involving Senator Kerry and an intern. Time, ABC news, the Washington Post and the AP are supposedly working on this story. Sources seem to believe this is why Dean decided to continue and has intensified his attacks on Kerry in recent days. It appears there is something to these rumors, as Tradesports.com is seeing a lot of activity on Kerry and Edwards. Kerry's chances of winning the Democratic nomination have dropped 17% to 81%, while Edwards chances of winning have climbed 14% to 19%. China's inflation rate held steady last month at 3.2%, near a 7-yr. high. Chartered Semi., Singapore's largest chip maker, said it sees strengthening demand through 05. Financial Times is reporting that attacks by insurgents in Iraq more than doubled in January. Business Week is reporting that Bank America may be acquired by a foreign concern.
Late-Night Trading
Asian markets are mostly higher, ranging from -.6% to +1.8%.
S&P 500 indicated +.12%.
NASDAQ indicated +.23%.
BOTTOM LINE: Seems as though tomorrow should be positive with the Biotech and Technology sectors leading the way. Asian markets are looking pretty good. As I stated in the previous post, I will closely monitor tomorrow's opening action. My short-term trading indicators are near sell signals, thus any unexpected morning weakness will lead me to a more conservative stance in the Portfolio.
Company/Estimate
ABX/.08
CHINA/.03
NANO/-.15
DP/.51
Splits
None of note
Economic Data
University of Michigan Consumer Confidence is expected to come in at 103.0 versus 103.8 last month. The U.S. Trade Deficit is expected to come in at $40B versus $38B last month.
Late-night News
Rumors are swirling on the net about the possibility of a scandal involving Senator Kerry and an intern. Time, ABC news, the Washington Post and the AP are supposedly working on this story. Sources seem to believe this is why Dean decided to continue and has intensified his attacks on Kerry in recent days. It appears there is something to these rumors, as Tradesports.com is seeing a lot of activity on Kerry and Edwards. Kerry's chances of winning the Democratic nomination have dropped 17% to 81%, while Edwards chances of winning have climbed 14% to 19%. China's inflation rate held steady last month at 3.2%, near a 7-yr. high. Chartered Semi., Singapore's largest chip maker, said it sees strengthening demand through 05. Financial Times is reporting that attacks by insurgents in Iraq more than doubled in January. Business Week is reporting that Bank America may be acquired by a foreign concern.
Late-Night Trading
Asian markets are mostly higher, ranging from -.6% to +1.8%.
S&P 500 indicated +.12%.
NASDAQ indicated +.23%.
BOTTOM LINE: Seems as though tomorrow should be positive with the Biotech and Technology sectors leading the way. Asian markets are looking pretty good. As I stated in the previous post, I will closely monitor tomorrow's opening action. My short-term trading indicators are near sell signals, thus any unexpected morning weakness will lead me to a more conservative stance in the Portfolio.
Thursday, February 12, 2004
Thursday Close
S&P 500 1,152.11-.49%
NASDAQ 2,073.61-.77%
Leading Sectors
Airlines+2.42%
HMO's+1.71%
Oil Service+1.19%
Lagging Sectors
Networking-1.10%
Drugs-1.26%
Semis-1.52%
Other
Crude Oil 34.14+.47%
Put/Call Ratio .54-19.4%
Base Metals 109.82+2.56%
Lumber 384.70+1.91%
Coal 46.5+3.33%
After-hours Movers
IMCL+32.1% on FDA approval of cancer drug Erbitux and a rebound from a pre-halt plunge due to speculation the drug would not be approved. The SEC is investigating the pre-halt trading.
DELL+1.6% on slightly better-than-expected 4th Q earnings and no change in 1st Q guidance.
NVDA-6.7% on 4th Q earnings miss and lowered 1st Q guidance.
ADI+4.55% on better-than-expected 1st Q earnings and raised 2nd Q guidance.
PHS+7.08% on better-than-expected 4th Q earnings and raised 04 guidance.
AEIS+10.3% on significantly better than expected 4th Quarter earnings and raised 1st Q guidance.
MTLG+9.2% on better-than-expected 4th Q earnings and raised 1st Q guidance.
TASR-5.2% down on profit-taking after huge short-squeeze.
After-hours News
U.S. stocks declined for the first day in three as the number of Americans filing jobless claims unexpectedly rose last week. The technology sector saw the most profit-taking ahead of Dell's earnings report after the close. Commodity related stocks were very strong again today on increasing prices resulting from insatiable Chinese demand. SBC and Bellsouth are likely to raise AT&T wireless bid. FCC ruled a computer-to-computer calling service isn't subject to traditional telephone rules, signaling it will take a hands-off approach to other internet-phone services as it begins a regulatory review of the VOIP industry. The market for VOIP technology is expected to rise to $15.1B by 07 from $3.3B today, according to researcher IDC. Business Week is positive on Chinadotcom(CHINA) in its Inside Wall Street column. Analyst Jon Rogers of Wachovia is positive on American Axle(AXL) in Business Week.
BOTTOM LINE: Dell's earnings, while not great, did not disappoint muted expectations. Several other stellar reports after the close and the approval of Imclone's Erbitux should provide enough fuel for the bulls to have a decent day tomorrow. I shifted a few positions around on the close, cutting the Portfolio's market exposure down to 80% net long. While the Portfolio did give up some recent gains today, it wasn't too bad. The fall in the Put/Call ratio is concerning, as it shows trader complacency. As well, my short-term trading indicators are close to giving a sell-signal, thus I will closely monitor tomorrow's open to make a decision on further hedging.
NASDAQ 2,073.61-.77%
Leading Sectors
Airlines+2.42%
HMO's+1.71%
Oil Service+1.19%
Lagging Sectors
Networking-1.10%
Drugs-1.26%
Semis-1.52%
Other
Crude Oil 34.14+.47%
Put/Call Ratio .54-19.4%
Base Metals 109.82+2.56%
Lumber 384.70+1.91%
Coal 46.5+3.33%
After-hours Movers
IMCL+32.1% on FDA approval of cancer drug Erbitux and a rebound from a pre-halt plunge due to speculation the drug would not be approved. The SEC is investigating the pre-halt trading.
DELL+1.6% on slightly better-than-expected 4th Q earnings and no change in 1st Q guidance.
NVDA-6.7% on 4th Q earnings miss and lowered 1st Q guidance.
ADI+4.55% on better-than-expected 1st Q earnings and raised 2nd Q guidance.
PHS+7.08% on better-than-expected 4th Q earnings and raised 04 guidance.
AEIS+10.3% on significantly better than expected 4th Quarter earnings and raised 1st Q guidance.
MTLG+9.2% on better-than-expected 4th Q earnings and raised 1st Q guidance.
TASR-5.2% down on profit-taking after huge short-squeeze.
After-hours News
U.S. stocks declined for the first day in three as the number of Americans filing jobless claims unexpectedly rose last week. The technology sector saw the most profit-taking ahead of Dell's earnings report after the close. Commodity related stocks were very strong again today on increasing prices resulting from insatiable Chinese demand. SBC and Bellsouth are likely to raise AT&T wireless bid. FCC ruled a computer-to-computer calling service isn't subject to traditional telephone rules, signaling it will take a hands-off approach to other internet-phone services as it begins a regulatory review of the VOIP industry. The market for VOIP technology is expected to rise to $15.1B by 07 from $3.3B today, according to researcher IDC. Business Week is positive on Chinadotcom(CHINA) in its Inside Wall Street column. Analyst Jon Rogers of Wachovia is positive on American Axle(AXL) in Business Week.
BOTTOM LINE: Dell's earnings, while not great, did not disappoint muted expectations. Several other stellar reports after the close and the approval of Imclone's Erbitux should provide enough fuel for the bulls to have a decent day tomorrow. I shifted a few positions around on the close, cutting the Portfolio's market exposure down to 80% net long. While the Portfolio did give up some recent gains today, it wasn't too bad. The fall in the Put/Call ratio is concerning, as it shows trader complacency. As well, my short-term trading indicators are close to giving a sell-signal, thus I will closely monitor tomorrow's open to make a decision on further hedging.
Thursday Mid-day Update
S&P 500 1,152.84-.43%
NASDAQ 2,077.17-.61%
Leading Sectors
Airlines+2.29%
HMO's+1.67%
Iron/Steel+.98%
Lagging Sectors
Internet-.84%
Drugs-1.07%
Semis-1.17%
Other
Crude Oil 33.9-.29%
Natural Gas 5.41+2.85%
Gold 414+.78%
10-Yr. Long-bond yield 4.03%+.09%
U.S. Dollar Index 85.16+.08%
Put/Call Ratio .44-34.3%
Copper 124.4+2.34%
Base Materials 109.82+2.56%
Market Movers
AET+5.8% on strong 4th Q earnings and raised 1st Q guidance.
CSC-8.2% on disappointing 4th Q earnings.
FSH+9.5% on the announcement of 2 accretive acquisitions.
LTR+4% on strong 4th Q earnings.
TASR+29% on short-squeeze...no news.
HRT+12.6% on technical break-out...no news.
TFX+8.7% on better-than-expected 4th Q and raised guidance.
ADVP+4.9% on approval by FTC for CMX merger.
LH-9.4% on lowered 1st Q guidance.
NANO+5.39% on strong nanotechnology sector and new contract.
Mid-day News
U.S. stocks are declining mid-day, as the number of Americans filing jobless claims unexpectedly rose last week, thus giving traders an excuse to take profits from the recent rally. Time Warner may join Disney bidding to counter hostile offer from Comcast. Xilinx concerned IBM does not have enough capacity to produce their chips. New Jersey officials have found the avian flu virus at 4 live chicken markets in the northern part of the state. Authorities said it is possible this strain could mutate into a form that hurts humans. U.S. initial jobless claims rose by 6K to 363K last week, more than expectations. Retail sales less autos came in above expectations at .9%, the highest in 5 months. Copper futures are at a 7-yr high on expectations that faster U.S. growth will boost industrial demand. Freddie Mac says 30-yr mortgage rate falls to 5.66% this week.
BOTTOM LINE: Today seems like a consolidation day to me. It does not appear to be the start of a significant correction. However, since the Portfolio is 100% net long, I will look to take some profits on the close if weakness continues throughout the day. The Portfolio's performance today is good, as a few of my longs are up substantially.
NASDAQ 2,077.17-.61%
Leading Sectors
Airlines+2.29%
HMO's+1.67%
Iron/Steel+.98%
Lagging Sectors
Internet-.84%
Drugs-1.07%
Semis-1.17%
Other
Crude Oil 33.9-.29%
Natural Gas 5.41+2.85%
Gold 414+.78%
10-Yr. Long-bond yield 4.03%+.09%
U.S. Dollar Index 85.16+.08%
Put/Call Ratio .44-34.3%
Copper 124.4+2.34%
Base Materials 109.82+2.56%
Market Movers
AET+5.8% on strong 4th Q earnings and raised 1st Q guidance.
CSC-8.2% on disappointing 4th Q earnings.
FSH+9.5% on the announcement of 2 accretive acquisitions.
LTR+4% on strong 4th Q earnings.
TASR+29% on short-squeeze...no news.
HRT+12.6% on technical break-out...no news.
TFX+8.7% on better-than-expected 4th Q and raised guidance.
ADVP+4.9% on approval by FTC for CMX merger.
LH-9.4% on lowered 1st Q guidance.
NANO+5.39% on strong nanotechnology sector and new contract.
Mid-day News
U.S. stocks are declining mid-day, as the number of Americans filing jobless claims unexpectedly rose last week, thus giving traders an excuse to take profits from the recent rally. Time Warner may join Disney bidding to counter hostile offer from Comcast. Xilinx concerned IBM does not have enough capacity to produce their chips. New Jersey officials have found the avian flu virus at 4 live chicken markets in the northern part of the state. Authorities said it is possible this strain could mutate into a form that hurts humans. U.S. initial jobless claims rose by 6K to 363K last week, more than expectations. Retail sales less autos came in above expectations at .9%, the highest in 5 months. Copper futures are at a 7-yr high on expectations that faster U.S. growth will boost industrial demand. Freddie Mac says 30-yr mortgage rate falls to 5.66% this week.
BOTTOM LINE: Today seems like a consolidation day to me. It does not appear to be the start of a significant correction. However, since the Portfolio is 100% net long, I will look to take some profits on the close if weakness continues throughout the day. The Portfolio's performance today is good, as a few of my longs are up substantially.
Thursday Watch
Earnings Announcements
Company/Estimate
BHI/.28
COX/.06
CVS/.58
Dell/.28
MTLG/.19
NVDA/.11
UNA/.01
XMSR/-1.15
ADI/.28
AH/.29
LH/.53
Splits
None of note
Economic Data
Advance Retail Sales for Jan. are expected to come in unch. vs. an increase of .5% last month.
Initial jobless claims are expected at 345K vs. 356k last week.
Continuing claims are expected at 3,100K vs. 3,123K last week.
Business inventories are expected to increase .3% vs. a .3% increase last month.
Late-night News
CEO's say they are more confident and are prepared to boost both capital expenditures and mergers/acquisitions activity, the Financial Times reported, citing a survey by Goldman Sachs. The general global business outlook index, the index of how many domestic deals CEO's are planning and the index of U.S. executives who plan to spend on fixed investment all increased significantly in the survey. CIA Director George Tenet has ordered an end to a practice whereby intelligence analysts aren't provided with details about the individuals who provided the information they are evaluating. Chinese industrial production rose 19% last month, its fastest pace on record, as factories made more cars, computers and clothes to meet rising demand at home and abroad. Japanese machinery orders rose 8.1% in December versus an expectation of 2.6% by 40 economists, bolstering economists' predictions that growing business investment is fueling growth in the world's second-largest economy.
Late-Night Trading
Asian markets are mixed, ranging from -.25% to +.75%.
S&P 500 indicated unch.
NASDAQ indicated +.10%.
BOTTOM LINE: The Goldman Sachs survey mentioned above confirms what I have been thinking. It is very likely 1st Q GDP growth will exceed the current 4.6% estimates. A number north of 5% growth is likely. I am a little troubled by the recent divergence between the performance of the Dow and the Nasdaq, but will attribute it to the recent vicious rotation out of and then into cyclicals in a very short period. Moreover, volume and bredth have not been exceptional on this last move up. The portfolio is having another very good year and I don't want to give back these significant gains, thus I will be very quick to shift to a more conservative stance if market weakness dictates such. The next couple of days I plan to rotate out of some recent winners and into some stocks I like fundamentally that have lagged and are just now breaking out technically. I will try and maintain 80-100% market exposure while making these changes.
Company/Estimate
BHI/.28
COX/.06
CVS/.58
Dell/.28
MTLG/.19
NVDA/.11
UNA/.01
XMSR/-1.15
ADI/.28
AH/.29
LH/.53
Splits
None of note
Economic Data
Advance Retail Sales for Jan. are expected to come in unch. vs. an increase of .5% last month.
Initial jobless claims are expected at 345K vs. 356k last week.
Continuing claims are expected at 3,100K vs. 3,123K last week.
Business inventories are expected to increase .3% vs. a .3% increase last month.
Late-night News
CEO's say they are more confident and are prepared to boost both capital expenditures and mergers/acquisitions activity, the Financial Times reported, citing a survey by Goldman Sachs. The general global business outlook index, the index of how many domestic deals CEO's are planning and the index of U.S. executives who plan to spend on fixed investment all increased significantly in the survey. CIA Director George Tenet has ordered an end to a practice whereby intelligence analysts aren't provided with details about the individuals who provided the information they are evaluating. Chinese industrial production rose 19% last month, its fastest pace on record, as factories made more cars, computers and clothes to meet rising demand at home and abroad. Japanese machinery orders rose 8.1% in December versus an expectation of 2.6% by 40 economists, bolstering economists' predictions that growing business investment is fueling growth in the world's second-largest economy.
Late-Night Trading
Asian markets are mixed, ranging from -.25% to +.75%.
S&P 500 indicated unch.
NASDAQ indicated +.10%.
BOTTOM LINE: The Goldman Sachs survey mentioned above confirms what I have been thinking. It is very likely 1st Q GDP growth will exceed the current 4.6% estimates. A number north of 5% growth is likely. I am a little troubled by the recent divergence between the performance of the Dow and the Nasdaq, but will attribute it to the recent vicious rotation out of and then into cyclicals in a very short period. Moreover, volume and bredth have not been exceptional on this last move up. The portfolio is having another very good year and I don't want to give back these significant gains, thus I will be very quick to shift to a more conservative stance if market weakness dictates such. The next couple of days I plan to rotate out of some recent winners and into some stocks I like fundamentally that have lagged and are just now breaking out technically. I will try and maintain 80-100% market exposure while making these changes.
Wednesday, February 11, 2004
Wednesday Close
S&P 500 1,157.76+1.07%
NASDAQ 2,089.66+.69%
Leading Sectors
I-Banks+3.88%
Iron/Steel+3.41%
Homebuilders+2.94%
Lagging Sectors
Fashion+.32%
Defense+.08%
HMO's-2.01%
Other
Crude Oil 33.9-.24%
Lumber 377.50+2.72%
VIX 15.39-3.45%
U.S. Dollar Index 85.08-.89%
10-Yr. Long-Bond Yield 4.03%-2.08%
After-hours Movers
INVN+3.41% up after meeting 4th quarter earnings estimates and affirming forecasts.
BRCD+2.96% up after beating 4th quarter earnings expectations and raising 1st Q guidance.
SONS-21.0% down after disclosing that it may restate results for 03 and before because some sales might not have been recorded at the right time.
CSC-5.21% down on disappointing 4th quarter earnings guidance.
After-hours News
U.S. stocks surged Wednesday, pushing the DJIA to its highest level since June 2001, after Federal Reserve Chairman Alan Greenspan said the central bank can remain patient before raising rates even as the economy expands at a faster-than-expected pace. The U.S dollar and interest rates declined on this news. Financials faired especially well today. Declining rates and Comcast's bid for Disney led investors to conclude that more takeovers will follow, generating large i-banking fees. As well, there was a continuation of the rotation back into tech and deep cyclicals, especially basic materials. Vodafone's CEO will recommend a bid of more than $30 billion for AT&T Wireless Services to his board this week, the Financial Times reported. Goodyear Tire said the SEC is investigating the company's restatement of financial results. GE was rated a new "Buy 2" at UBS.
BOTTOM LINE: Many different sectors participated in the rally today, however the advance/decline line wasn't as strong as I would have liked. Volume wasn't exceptional either. However, the portfolio had an excellent day and is now 100% net long. The few positions I added were in the tech and basic materials areas. OHB, the small-cap homebuilder that I bought 2 days ago, had a great day(+5%). I am holding onto this position, as I expect it to rally further over the course of the next few weeks on great fundamentals, improving technicals and a low valuation. The economy is in a sweet spot right now with great growth, low inflation, improving labor conditions, excellent profits and interest rates at 40-yr. lows. I am looking for the trends over the last few days to continue for awhile. The market will trend higher and select stocks could see extraordinary gains.
NASDAQ 2,089.66+.69%
Leading Sectors
I-Banks+3.88%
Iron/Steel+3.41%
Homebuilders+2.94%
Lagging Sectors
Fashion+.32%
Defense+.08%
HMO's-2.01%
Other
Crude Oil 33.9-.24%
Lumber 377.50+2.72%
VIX 15.39-3.45%
U.S. Dollar Index 85.08-.89%
10-Yr. Long-Bond Yield 4.03%-2.08%
After-hours Movers
INVN+3.41% up after meeting 4th quarter earnings estimates and affirming forecasts.
BRCD+2.96% up after beating 4th quarter earnings expectations and raising 1st Q guidance.
SONS-21.0% down after disclosing that it may restate results for 03 and before because some sales might not have been recorded at the right time.
CSC-5.21% down on disappointing 4th quarter earnings guidance.
After-hours News
U.S. stocks surged Wednesday, pushing the DJIA to its highest level since June 2001, after Federal Reserve Chairman Alan Greenspan said the central bank can remain patient before raising rates even as the economy expands at a faster-than-expected pace. The U.S dollar and interest rates declined on this news. Financials faired especially well today. Declining rates and Comcast's bid for Disney led investors to conclude that more takeovers will follow, generating large i-banking fees. As well, there was a continuation of the rotation back into tech and deep cyclicals, especially basic materials. Vodafone's CEO will recommend a bid of more than $30 billion for AT&T Wireless Services to his board this week, the Financial Times reported. Goodyear Tire said the SEC is investigating the company's restatement of financial results. GE was rated a new "Buy 2" at UBS.
BOTTOM LINE: Many different sectors participated in the rally today, however the advance/decline line wasn't as strong as I would have liked. Volume wasn't exceptional either. However, the portfolio had an excellent day and is now 100% net long. The few positions I added were in the tech and basic materials areas. OHB, the small-cap homebuilder that I bought 2 days ago, had a great day(+5%). I am holding onto this position, as I expect it to rally further over the course of the next few weeks on great fundamentals, improving technicals and a low valuation. The economy is in a sweet spot right now with great growth, low inflation, improving labor conditions, excellent profits and interest rates at 40-yr. lows. I am looking for the trends over the last few days to continue for awhile. The market will trend higher and select stocks could see extraordinary gains.
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