What Happened In The Market Today…28 Jan 09

What’s Happening In The Market Now…...

• Stocks jumped up at the open this morning.
• Investors appear to be looking to the massive government spending to jolt the economy out of a yearlong recession that is the most severe in decades.
• Investors think the Federal Reserve is all but certain to leave its federal funds rate at a record low to try to help the economy by making it cheaper to borrow money.
• The Fed is also trying provide relief for homeowners nearing foreclosure with programs which could lower the amount the homeowner owes on the mortgage, reduce the interest rate or lengthening the term of the loan.
• Sectors starting the day out strong include banks, life & health insurance and financial services while electronic manufacturing services, gold and integrated telecom are down.
• Volume leaders include Wells Fargo and Company (WFC), EMC Corp (EMC), United States Oil Fund LP (USO), Wyeth (WYE) and Research In Motion Ltd (RIMM).

Stocks Most Watched Today
Wells Fargo & Company (WFC), J. C. Penney Company, Inc (JCP), Marriott International, Inc. (MAR), Royal Caribbean Cruises Ltd. (RCL), Nippon Telegraph & Telephone Corp. (NTT), Praxair Inc (PX), Monsanto Co (MON), Dell Inc (DELL), Juniper Networks Inc (JNPR), Deere and Co (DE), Genuine Parts Co (GPC), Illinois Tool Works Inc (ITW), Ciena Corporation New (CIEN), Newmont Mining Corp Holding Co (NEM) and Novartis ADR (NVS).

Today’s News Leaders…
Wells Fargo and Company (WFC), Royal Caribbean Cruises Ltd (RCL), Dell Inc (DELL), Newmont Mining Corp Holding Co (NEM) and Novartis AG (NVS) top the lists of companies with news today.

Analysts Favorites…
Research in Motion (RIMM), Wal-Mart Stores Inc (WMT), Clorox Co (CLX), Expeditors International of Washington Inc (EXPD) and Netflix Inc (NFLX). Click on one of the tickers to find out the details on these stocks.

ETFs and HOLDRs Covered Today…
iShares Dow Jones US Finance Sector Index Fund (IYF), iShares Russell 1000 Index Fund (IWB), SPDR KBW Bank (KBE), ProShares UltraShort S&P500 (SDS) and Market Vectors Gold Miners (GDX). Click on one of the tickers to find out the details on these stocks.

Tip of the Day…
Try to build Flexibility into your portfolio. Keep a spreadsheet and make notes on why you made all your investment decisions along with the characteristics of the stocks and trades. Try to find what works then do more of the same.

Source: MarketIntelligenceCenter.com

FDIC May Run "Bad Bank"

Bloomberg has an article on: FDIC may run Bad Banks

The Federal Deposit Insurance Corp. may manage the so-called bad bank that the Obama administration is likely to set up as it tries to break the back of the credit crisis.

U.S. stocks gained, extending a global rally, on optimism the bad-bank plan will help shore up the economy. The Standard & Poor’s 500 Stock Index rose 2.4 percent, Bank of America Corp., down 54 percent this year before today, rose 15 percent. Citigroup Inc., which had fallen 47 percent this year, climbed 18 percent.

FDIC Chairman Sheila Bair is pushing to run the operation, which would buy the toxic assets clogging banks’ balance sheets.

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The bad-bank initiative may allow the government to rewrite some of the mortgages that underpin banks’ bad debt, in the hopes of stemming a crisis that has stripped more than 1.3 million Americans of their homes. Some lenders may be taken over by regulators and some management teams could be ousted as the government seeks to provide a shield to taxpayers.

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Still, nationalization of a swath of the banking industry is unlikely. House Financial Services Chairman Barney Frank said yesterday “the government should not take over all the banks.” Bair said earlier this month she would be “very surprised if that happened.”

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Obama is under increasing pressure to drastically revamp the $700 billion Troubled Asset Relief Program for the ailing industry. While setting up a bank to buy underwater assets is emerging as a favored approach, it could drive up the cost of the rescue in excess of $1 trillion.

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Billionaire investor George Soros said in Davos today the plan to buy toxic assets won’t be enough to get financial institutions to start lending again. “It’s not the measure that would turn the situation around and enable the banks to lend. You are nationalizing the debt and keeping the upside in private hands.”

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A key question for the bad bank would be how to value the toxic assets it would buy. Geithner, outlined three possible alternatives: look at how the market is pricing similar assets; use computer model-based estimates from independent firms; and seek the judgment of bank supervisors.

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Bair has said that cash from the TARP may help capitalize the bad bank and that commercial lenders may kick in some money of their own. One possibility that’s been discussed is issuing firms some kind of stock in the new organization as partial payment for their impaired assets.

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The government will likely use its ownership of toxic assets to rework soured mortgages and prevent foreclosures.

The financial sector stocks and ETFs are taking off today. Financial Select Sector SPDR (XLF) is up 11% today. WellsFargo is up 25%, Citi is up 17% and Bank of America is up 15%. These are mind-blowing returns for a day. The question is how long will this rally continue ? Again and again we have seen these rallies fizzle out.

Are Stocks Undervalued Right Now ?

In 2008, the U.S. stock market went from gangbusters to just plain busted: The world's most watched equity index, the Dow Jones Industrial Average, plummeted 30%, while the S&P 500 plunged 45% to an 11-year low. All in all, it was the most severe annual loss for both indexes since the Great Depression. Does it mean that the stock market is under valued ? Is this the best time to load up stocks ?

As you can see, present stock market valuations are nowhere near the underrated levels reached in 1932, at the end of the Great Depression. Not only that, they still stand well above the "Normal Range" of valuation seen during the bulk of the market's existence.

Make no mistake: No matter how powerful and persistent the bear market rallies are from this point forward, this is still very much a bear market.

Source: Elliott Wave

Earning News - 27th Jan 09

Lexmark Guides Above Estimates
Lexmark International Inc. (LXK) said it expects first quarter earnings of $0.65 to $0.75 per share, excluding a restructuring charge of $0.13 per share. The current consensus earnings estimate is $0.63 per share for the quarter ending March 31, 2009.

Kinetic Concepts Guides Above Estimates
Kinetic Concepts Inc. (KCI) said it expects 2009 non-GAAP earnings of $3.95 to $4.10 per share on revenue of $2.00 billion to $2.06 billion. The current consensus earnings estimate is $3.63 per share on revenue of $2.06 billion for the year ending December 31, 2009.

Gilead Sciences Provides Guidance
Gilead Sciences Inc. (GILD) said during its conference call it expects 2009 net product revenue of $5.90 billion to $6.00 billion. The current consensus revenue estimate, which includes royalty, contract and other revenues, is $6.37 billion for the year ending December 31, 2009.

Stryker Sees Revenue Above Estimates
Stryker Corp. (SYK) said it expects 2009 earnings of $3.12 to $3.22 per share on revenue of $7.12 billion to $7.32 billion. The current consensus earnings estimate is $3.14 per share on revenue of $7.03 billion for the year ending December 31, 2009.

Bristol-Myers Squibb Guides Inline
Bristol-Myers Squibb (BMY) said it expects 2009 earnings of $1.85 to $2.00 per share. The current consensus earnings estimate is $1.96 per share for the year ending December 31, 2009.

FPL Group Reaffirms
FPL Group Inc. (FPL) said it continues to expect 2009 earnings of $4.05 to $4.25 per share and 2010 earnings of $4.50 to $4.90 per share. The current consensus earnings estimate is $4.08 per share for the year ending December 31, 2009 and earnings of $4.61 per share for the year ending December 31, 2010.

St. Jude Medical Raises Guidance, but Remains Inline with Estimates
St. Jude Medical Inc. (STJ) said it expects first quarter earnings of $0.57 to $0.59 per share and it now expects 2009 earnings of $2.48 to $2.54 per share. The company's previous guidance was 2009 earnings of $2.47 to $2.52 per share. The current consensus earnings estimate is $0.59 per share for the quarter ending March 31, 2009 and $2.52 per share for the year ending December 31, 2009.

Hershey Guides Inline
Hershey Company (HSY) said it expects 2009 earnings to be above $1.88 per share and below $1.99 per share on revenue of $5.24 billion to $5.29 billion. The current consensus earnings estimate is $1.90 per share on revenue of $5.24 billion for the year ending December 31, 2009.

DuPont Lowers Guidance to be Inline with Estimates
DuPont (DD) said it expects first quarter earnings of $0.50 to $0.70 per share and now expects 2009 earnings of $2.00 to $2.50 per share. The current consensus earnings estimate is for earnings of $0.81 per share for the quarter ending March 31, 2009. The company's previous fiscal year guidance was for earnings of $2.25 to $2.75 per share and the current consensus earnings estimate is $2.23 per share for the year ending December 31, 2009.

McGraw-Hill Provides Mixed Guidance
McGraw-Hill Companies (MHP) said it expects 2009 earnings of $2.20 to $2.30 per share on revenue of $6.23 billion to $6.29 billion. The current consensus earnings estimate is $2.42 per share on revenue of $5.98 billion for the year ending December 31, 2009.

STMicroelectronics Sees Revenue Below Estimates
STMicroelectronics (STM) said it expects first quarter revenue of $1.50 billion to $1.85 billion. The current consensus estimate is revenue of $2.06 billion for the quarter ending March 31, 2009.

Yahoo! Sees Revenue Below Estimates
Yahoo! Inc. (YHOO) said it expects first quarter revenue of $1.525 billion to $1.725 billion, including TAC. The current consensus revenue estimate is $1.78 billion, including TAC, and $1.29 billion, excluding TAC, for the quarter ending March 31, 2009.

Altera Guides Below Estimates
Altera Corp. (ALTR) said it expects first quarter revenue of $235.9 million to $267.3 million. The current consensus estimate is revenue of $295.6 million for the quarter ending March 31, 2009.

StanCorp Financial Sees Revenue Below Estimates
StanCorp Financial (SFG) said it expects 2009 revenue of approximately $2.667 billion. The current consensus estimate is revenue of $2.88 billion for the year ending December 31, 2009.

United States Steel Sees First Quarter Loss
United States Steel (X) said it expects to report an operating loss in the first quarter. The current consensus estimate is for earnings of $0.45 per share for the quarter ending March 31, 2009.

Bemis Guides Below Estimates
Bemis Company Inc. (BMS) said it expects first quarter earnings of $0.30 to $0.38 per share and 2009 earnings of $1.50 to $1.70 per share. The current consensus earnings estimate is $0.43 per share for the quarter ending March 31, 2009 and $1.75 per share for the year ending December 31, 2009.

Corning Lowers Expectations
Corning Inc. (GLW) said it expects first quarter results to be approximately breakeven with revenue below $1.1 billion. The current consensus earnings estimate is $0.20 per share on revenue of $1.1 billion for the quarter ending March 31, 2009.

Tellabs Guides Below Estimates
Tellabs (TLAB) said it expects first quarter revenue of $345.0 million to $375.0 million. The current consensus estimate is revenue of $384.7 million for the quarter ending March 31, 2009.

First Cash Financial Services Guides Below Estimates
First Cash Financial Services (FCFS) said it expects 2009 earnings of $1.36 to $1.38 per share. The current consensus earnings estimate is $1.40 per share for the year ending December 31, 2009.

What Happened In The Market Today...27 Jan 09

What’s Happening In The Market Now...

• The markets opened the day mixed as earnings reports continue to paint a mixed picture.
  
• States Steel Corp. (X) and American Express Co. (AXP) managed to post profits while DuPont (DD) said it swung to a fourth quarter loss and Yahoo (YHOO) fourth-quarter earnings are expected to be down.
  
• The Standard & Poor's/Case-Shiller 20-city housing index tumbled by a record 18.2 percent from November 2007, the largest decline since its inception in 2000. The 10-city index dropped 19.1 percent, tied with October for the biggest drop in its 21-year history.
  
• Sectors starting the day out strong include coal & consumable fuel, industrial REITs and consumer finance while integrated telecom, office services & supplies and oil & gas refiners are down.
  
• Volume leaders include Microsoft Corp (MSFT), JP Morgan Chase and Co (JPM), Sprint Nextel Corporation (S), Dow Chemical Co (DOW) and Caterpillar Inc (CAT).
  

Stocks Most Watched Today
Corning Inc. (GLW), First Solar, Inc. (FSLR), Peabody Energy Corp. (BTU), Valero Energy Corp. (VLO), New York Community Bancorp Inc. (NYB), CV Therapeutics Inc (CVTX), US Steel Corp (X), Bristol Myers Squibb Co (BMY), Steel Dynamics Inc (STLD), Reliance Steel and Aluminum Co (RS), Vimpel Communications (VIP), Verizon Communications Inc (VZ), Central Fund of Canada Ltd (CEF), Amgen Inc (AMGN) and Whiting Petroleum Corp (WLL).

Today’s News Leaders...
CV Therapeutics Inc (CVTX), Corning Inc (GLW), Verizon Communications Inc (VZ), US Steel Corp (X) and Peabody Energy Corporation (BTU) top the lists of companies with news today.

Analysts Favorites...
Oracle Corp (ORCL), DirectTV Group Inc (DTV), Prudential Financial Inc (PRU), Kohls Corporation (KSS) and Sanofi Aventis (SNY).

ETFs and HOLDRs Covered Today...
SPDR Gold Trust (GLD), iShares DJ US Real Estate Index Fund (IYR), ProShares Ultra Oil and Gas (DIG), Market Vectors Steel Index Fund (SLX) and iShares S&P MidCap 400 Index Fund (IJH).

Tip of the Day...
Try to build Flexibility into your portfolio. Set aside a small portion (about 5%) of your portfolio to take advantage of special situations and opportunities that might pop up. This is not for speculation, it's for things like buying that stock you have had your eye on when it bottoms out so you can ride it all the way back up.

Source: MarketIntelligenceCenter.com

Earning News - 26th Jan 09

McKesson Raises Guidance
McKesson Corp. (MCK) said it now expects 2009 earnings of $4.15 to $4.30 per share, excluding items. The company's previous guidance was earnings of $4.00 to $4.15 per share and the current consensus earnings estimate is $4.01 per share for the year ending March 31, 2009.

Coventry Health Care Reaffirms
Coventry Health Care Inc. (CVH) said it continues to expect fourth quarter earnings of approximately $0.60 per share and 2009 earnings of $1.70 to $1.90 per share. The current consensus earnings estimate is $0.59 per share for the quarter ending December 31, 2008 and $1.99 per share for the year ending December 31, 2009.

Netflix Guides Revenue Above Estimates; Earnings Inline
Netflix Inc. (NFLX) said it expects first quarter earnings of $0.25 to $0.33 per share on revenue of $387.0 million to $393.0 million. The current consensus earnings estimate is $0.29 per share on revenue of $370.6 million for the quarter ending March 31, 2009. The company also said it expects 2009 earnings of $1.43 to $1.59 per share on revenue of $1.58 billion to $1.635 billion. The current consensus earnings estimate is $1.51 per share on revenue of $1.54 billion for the year ending December 31, 2009.

Amgen Sees Revenue Below Estimates; Earnings Inline
Amgen Inc. (AMGN) said it expects 2009 earnings of $4.55 to $4.75 per share on revenue of $14.8 billion to $15.2 billion. The current consensus earnings estimate is $4.58 per share on revenue of $15.41 billion for the year ending December 31, 2009.

Home Depot Reaffirms
Home Depot Inc. (HD) said it continues to expect fiscal year earnings of approximately $1.73 per share and revenue to be as low as $71.16 billion. The current consensus earnings estimate is $1.72 per share on revenue of $71.53 billion for the year ending January 31, 2009.

Quest Diagnostics Guides Revenue Below Estimates; Earnings Inline
Quest Diagnostics Inc. (DGX) said it expects 2009 earnings of $3.50 to $3.70 per share on revenue of approximately $7.47 billion. The current consensus earnings estimate is $3.57 per share on revenue of $7.53 billion for the year ending December 31, 2009.

Eaton Lowers Revenue Guidance and Provides Mixed Earnings Guidance
Eaton Corp. (ETN) said it expects first quarter results of approximately breakeven with revenue below $3.49 billion and expects 2009 earnings of $4.20 to $5.20 per share on revenue of approximately $14.15 billion. The current consensus estimate is earnings of $0.94 per share on revenue of $3.58 billion for the quarter ending March 31, 2009 and earnings of $4.73 per share on revenue $14.53 billion for the year ending December 31, 2009.

Covidien Reaffirms
Covidien Ltd. (COV) said it continues to expect fiscal 2009 revenue of $9.91 billion to $10.21 billion. The current consensus estimate is revenue of $10.11 billion for the year ending September 30, 2009.

Pactiv Guides Below 2009 Estimates
Pactiv Corp. (PTV) said it expects first quarter earnings of $0.44 to $0.48 per share. The current consensus earnings estimate is $0.39 per share for the quarter ending March 31, 2009. The company also said it expects 2009 earnings of $1.63 to $1.83 per share, excluding a one-time gain of $0.17 per share, on revenue of $3.03 billion to $3.14 billion. The current consensus earnings estimate is $1.97 per share on revenue of $3.57 billion for the year ending December 31, 2009.

TI Guides Below Estimates
Texas Instruments Inc. (TXN) said it expects first quarter results to range from a loss of $0.11 per share to earnings of $0.03 per share on revenue of $1.62 billion to $2.12 billion. The current consensus earnings estimate is $0.04 per share on revenue of $2.13 billion for the quarter ending March 31, 2009.

VMware Sees Revenue Below Estimates
VMware Inc. (VMW) said it expects first quarter revenue of approximately $475.0 million. The current consensus estimate is revenue of $496.9 million for the quarter ending March 31, 2009.

Sealed Air Guides Below Estimates
Monday, January 26, 2009 7:30:01 AM ET
View: Complete Article | Historical Guidance
Sealed Air Corp. (SEE) said it expects 2009 earnings of $1.25 to $1.45 per share, excluding items. The current consensus earnings estimate is $1.46 per share for the year ending December 31, 2009.

Caterpillar Warns
Caterpillar Inc. (CAT) said it expects 2009 earnings of approximately $2.50 per share on revenue of approximately $40.0 billion. The current consensus earnings estimate is $4.37 per share on revenue of $47.9 billion for the year ending December 31, 2009.

Kimberly-Clark Guides Below Estimates
Kimberly-Clark Corporation (KMB) said it expects 2009 earnings of $4.00 to $4.20 per share on revenue of $18.44 billion to $18.64 billion. The current consensus earnings estimate is $4.52 per share on revenue of $19.22 billion for the year ending December 31, 2009.

Pfizer Guides Below Estimates
Pfizer Inc (PFE) said it expects 2009 earnings of $1.85 to $1.95 per share on revenue of $44.0 billion to $46.0 billion. The current consensus earnings estimate is $2.48 per share on revenue of $48.9 billion for the year ending December 31, 2009.

71400: Number Of Jobs Cut In A Single Day

CNN Money has an article on the current job loss: Bloody Monday: Over 71,400 jobs lost

The final week of January began with a bloodbath for the job market, as over 71,400 more cuts were announced on Monday alone.

At least six companies from manufacturing and service industries announced cost-cutting initiatives that included slashing thousands of jobs.

More than 200,000 job cuts have been announced so far this year, according to company reports. Nearly 2.6 million jobs were lost over 2008, the highest yearly job-loss total since 1945.

"It's all about the consumer, and the consumer's been hit hard

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Construction machinery manufacturer Caterpillar (CAT) said Monday it will cut 20,000 jobs amid a "very challenging global business environment."

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Pfizer (PFE) said in an earnings report it would cut 10% of its staff of 81,900 and close five of its manufacturing plants. And a second round of cuts will shed about 15% of employees from the combined Pfizer/Wyeth staff of 120,000. That makes a total of 26,000 jobs lost. The company already cut 4,700 jobs in 2008.

Sprint Nextel Corp. (S) will cut a total of about 8,000 jobs by March 31

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Home Depot (HD), the world's largest home improvement retailer, announced Monday it will eliminate its EXPO design center business and cut 7,000 associates, or approximately 2% of the company's total workforce.

Texas Instruments (TXN) said it will slash its workforce by 3,400 employees to cope with weak demand and the slowing economy.

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Dutch financial group ING said Monday it will take a 2008 loss of $1.3 billion and cut 7,000 jobs.

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Deere& Co. (DE) , the world's top farm-equipment maker, said it would cut nearly 700 jobs between factories in Brazil and Iowa.

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Wednesday, in particular, was littered with a slew of job cuts: BHP Billiton, Clear Channel Communications, Intel, Rohm and Haas Co., UAL Corp. and Williams-Sonoma all announced job cuts totaling over 27,000 positions.
Schlumberger said Friday that it will cut 5,000 jobs worldwide, with 1,000 of the cuts taking place in North America.

Also last week, Time Warner Inc.'s Warner Bros. Entertainment said it would cut about 800 jobs, or 10% of its worldwide staff in the upcoming weeks, while Microsoft unveiled its plan to cut up to 5,000 jobs - 5.5% of its global workforce.

When the unemployment keeps rising, the economy and stock market goes down the drain. With jobs getting cut, everyone starts spending less and start saving $$$. In long term this is actually a good thing. I believe the US economy will eventually recover, but there is a long way to go before the system is cleaned out. Till then i will remain a bear and continue shorting every opportunity i get. The SP500 chart shows it all how the market has been.

What Happened In The Market Today...26 Jan 09

What’s Happening In The Market Now...

• Stocks were cautiously up at the open this morning.
  
• The announcement of Pfizer's (PFE) acquisition of Wyeth (WYE) shows deals are possible even in a recession.
  
• Caterpillar (CAT) said it was "whipsawed" in the final three months of 2008 as a sharp drop in economic conditions and plunging commodity prices hit industries like mining that use the company's equipment.
  
• More jobs cuts and poor earnings have served to dampen enthusiasm from the Pfizer deal.
• The National Association of Realtors said sales of existing homes rose to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November. December's sales had been expected to fall to a pace of 4.4 million units according to Thomson Reuters.
  
• Sectors starting the day out strong include diversified metals & mining, real estate services, auto manufacturers and homebuilding while specialty chemicals, education services and construction & farming machinery are down.
  
• Volume leaders include Pfizer Inc (PFE), Caterpillar Inc (CAT), Citigroup Inc (C), Wells Fargo and Company (WFC) and Rohm and Haas Co (ROH).

Stocks Most Watched Today
Home Depot, Inc (HD), Halliburton Company (HAL), ITT Educational Services Inc. (ESI), HSBC Holdings (HBC), HJ Heinz Co. (HNZ), ING Group (ING), Danaher Corp (DHR), Covidien Ltd (COV), Tyson Foods (TSN), Quest Diagnostics Inc (DGX), GlaxoSmithKline PLC (GSK), Weatherford International Ltd (WFT), Pride International Inc (PDE), Lennar Corp (LEN) and Eaton Corp (ETN).

Today’s News Leaders...
Home Depot Inc (HD), Weatherford International Ltd (WFT), Halliburton Co (HAL), Lennar Corp (LEN) and Tyson Foods (TSN) top the lists of companies with news today.

Analysts Favorites...
Caterpillar Inc (CAT), Bristol Myers Squibb Co (BMY), Thermo Fisher Scientific Inc (TMO), Safeway Inc (SWY) and Sears Holdings Corporation (SHLD).

ETFs and HOLDRs Covered Today...
iShares Trust FTSE Xinhua China Index Fund (FXI), Industrial Select Sector (XLI), Semiconductor HOLDRS Trust (SMH), Vanguard Total Stock Market ETF (VTI) and S&P SPDRS Dep Rec (MDY).

Tip of the Day...
Try to build Flexibility into your portfolio. Unless you are holding a stock purely for dividends, no investment is forever. If you hold it forever you will never take the profits that are due to you.

Source: MarketIntelligenceCenter.com

What Happened In The Market Today...23 Jan 09

What’s Happening In The Market Now...

• The market was down sharply at the open once again this morning.
  
• Corporate earnings reports continue to come in short of estimates and increase fears about the extent of the recession.
  
• The British government released data showing the country's economy shrank 1.5 percent in the fourth quarter, after contracting 0.6 percent during the third quarter. The fourth-quarter decline was the worst in Britain since 1980.
  
• An increase in U.S. crude oil inventories helped pushed oil prices down while the pound fell to its lowest level against the dollar since September 1985.
  
• Sectors starting the day out strong include gold, thrifts & mortgage and semiconductor equipment while office electronics, motorcycle manufacturing and airlines are down.
• Volume leaders include General Electric Capital Corp (GE), Bank of America Corporation (BAC), Pfizer Inc (PFE), Wyeth (WYE) and Capital One Financial Corp (COF).

Stocks Most Watched Today
American Express Company (AXP), Petroleo Brasileiro (PBR), Biogen Idec Inc. (BIIB), Intuitive Surgical, Inc. (ISRG), Geron Corporation (GERN), Schlumberger Ltd (SLB), Yamana Gold Inc (AUY), Wyeth (WYE), Synaptics Incorporated (SYNA), Expeditors International of Washington Inc (EXPD), Illumina Inc (ILMN), Capital One (COF), Caterpillar Inc (CAT), Arcelor Mittal (MT) and Microsemi Corp. (MSCC)

Today’s News Leaders...
Wyeth (WYE), Capital One (COF), Geron Corp (GERN), American Express Company (AXP) and Schlumberger Ltd (SLB) top the lists of companies with news today.

Analysts Favorites...
Stocks on the list include: Wal-Mart Stores Inc (WMT), KLA Tencor Corporation (KLAC), Intuit Inc (INTU), Fortune Brands Inc (FO) and Goldman Sachs Group Inc (GS).

ETFs and HOLDRs Covered Today...
iShares Russell 2000 Index Fund (IWM), ProShares Ultra S&P500 (SSO), iShares MSCI Emerging Markets Index Fund (EEM), Select Sector SPDR Energy Fund (XLE) and Vanguard Growth ETF (VUG).

Tip of the Day...
Set a course and stick to it. This might sound inflexible but do your homework up front and you will have a plan worth sticking with no matter how the market looks at any one moment in time

Source: MarketIntelligenceCenter.com

Earning News - 22nd Jan 09

LSB Industries Guides Above Revenue Estimates
LSB Industries Inc (LXU) said it expects fourth quarter revenue of approximately $179.1 million. The current consensus estimate is revenue of $148.3 million for the quarter ending December 31, 2008.

Matthews Reaffirms Above Estimates
Matthews International (MATW) said it is cautious about 2009, but continues to expect earnings of $2.62 to $2.74 per share. The current consensus earnings estimate is $2.60 per share for the year ending September 30, 2009.

Digi International Reaffirms
Digi International Inc. (DGII) said it expects second quarter earnings of $0.01 to $0.07 per share on revenue of $40.0 million to $46.0 million. The current consensus earnings estimate is $0.05 per share on revenue of $43.3 million for the quarter ending March 31, 2009. The company also said it continues to expect fiscal 2009 earnings of $0.19 to $0.47 per share on revenue of $170.0 million to $200.0 million. The current consensus earnings estimate is $0.24 per share on revenue of $177.5 million for the year ending September 30, 2009.

Synaptics Guides Inline
Synaptics (SYNA) said it expects third quarter revenue of $88.0 million to $98.0 million. The current consensus estimate is revenue of $93.9 million for the quarter ending March 31, 2009.

DRI Reaffirms, with Revenue Above Estimates
DRI Corporation (TBUS) said it continues to expect 2009 earnings to exceed $0.20 per share and revenue to exceed $90.0 million. The current consensus earnings estimate is $0.21 per share on revenue of $86.0 million for the year ending December 31, 2009.

Exelon Guides Inline for 2009, but sees First Quarter Above Estimates
Exelon Corp. (EXC) said it expects first quarter earnings of $1.10 to $1.20 per share and continues to expect 2009 earnings of $4.00 to $4.30 per share. The current consensus earnings estimate is $1.01 per share for the quarter ending March 31, 2009 and $4.20 per share for the year ending December 31, 2009.

Northrop Grumman Guides Inline
Northrop Grumman Corp. (NOC) said it now expects 2008 earnings to meet the upper-end of its previous guidance range of $5.10 to $5.20 per share, excluding items. The current consensus earnings estimate is $5.20 per share for the year ending December 31, 2008.

LSI Industries Guides Inline
LSI Industries Inc. (LYTS) said it expects 2009 earnings of $0.16 to $0.20 per share on revenue of $250.0 million to $265.0 million. The current consensus earnings estimate is $0.16 per share on revenue of $253.8 million for the year ending June 30, 2009.

Baxter Guides Inline for 2009
Baxter International (BAX) said it expects first quarter earnings of $0.80 to $0.82 per share on revenue of approximately $2.90 billion. The current consensus earnings estimate is $0.83 per share on revenue of $2.90 billion for the quarter ending March 31, 2009. The company also said it expects 2009 earnings of $3.70 to $3.78 per share on revenue of approximately $12.3 billion. The current consensus earnings estimate is $3.74 per share on revenue of $12.6 billion for the year ending December 31, 2009.

AmerisourceBergen Reaffirms
AmerisourceBergen Corp. (ABC) said it continues to expect 2009 earnings of $3.08 to $3.25 per share. The current consensus earnings estimate is $3.14 per share for the year ending September 30, 2009.

A. O. Smith Guides Inline
A. O. Smith Corp. (AOS) said it expects 2009 earnings of $2.40 to $2.60 per share. The current consensus earnings estimate is $2.41 per share for the year ending December 31, 2009.

UnitedHealth Reaffirms
UnitedHealth Group Inc. (UNH) said it continues to expect 2009 earnings of $2.90 to $3.15 per share. The current consensus earnings estimate is $3.03 per share for the year ending December 31, 2009.

Intuitive Surgical Guides Below Estimates
Intuitive Surgical Inc. (ISRG) said during its conference call it expects 2009 earnings of $5.30 to $5.40 per share. The current consensus earnings estimate is $5.56 per share for the year ending December 31, 2009.

City National Guides Below Estimates
City National Corp. (CYN) said it expects to remain profitable in 2009 but believes earnings will be below $2.11 per share. The current consensus earnings estimate is $2.39 per share for the year ending December 31, 2009.

MEMC Electronic Materials Suggests Revenue Below Estimates
MEMC Electronic Materials (WFR) said it has low visibility into the first quarter and cannot providing meaningful guidance, but believes revenue could be as low as $212.9 million. The current consensus estimate is $0.54 per share for the quarter ending March 31, 2009.

Marvell Technology Lowers Guidance
Marvell Technology Group (MRVL) said it expects fourth quarter revenue of $500.0 million to $520.0 million. The company's previous guidance was revenue of $690.0 million to $730.0 million and the current consensus estimate is revenue of $706.2 million for the quarter ending January 31, 2009.

Tractor Supply Lowers 2008 Outlook; Guides Inline for 2009
Tractor Supply Company (TSCO) said it expects fourth quarter revenue of approximately $799.5 million. The current consensus estimate is revenue of $801.4 million for the quarter ending December 31, 2008. The company also said it now expects 2008 earnings of $2.17 to $2.19 per share. The company's previous guidance was earnings of $2.49 to $2.55 per share and the current consensus earnings estimate is $2.54 per share for the year ending December 31, 2008. The company also said it expects 2009 earnings of $2.58 to $2.74 per share on revenue of $3.20 billion to $3.30 billion. The current consensus earnings estimate is $2.72 per share on revenue of $3.26 billion for the year ending December 31, 2009.

Microsoft Withdraws Guidance
Microsoft Corp. (MSFT) said it is now longer able to provide guidance for the remainder of the year. The company's previous guidance was for fiscal year earnings of $2.00 to $2.10 per share on revenue of $64.9 billion to $66.4 billion. The current consensus earnings estimate is $1.95 per share on revenue of $63.64 billion for the year ending June 30, 2009.

DryShips Warns
DryShips Inc. (DRYS) said it expects fourth quarter earnings of $0.63 to $0.71 per share. The current consensus earnings estimate is $1.26 per share for the quarter ending December 31, 2008.

Deluxe Guides Below Estimates
Deluxe Corp. (DLX) said it expects first quarter earnings of $0.38 to $0.46 per share on revenue of $335.0 million to $350.0 million. The current consensus earnings estimate is $0.47 per share on revenue of $357.9 million for the quarter ending March 31, 2009. The company said it expects 2009 earnings of $1.95 to $2.35 per share on revenue of $1.30 billion to $1.40 billion. The current consensus earnings estimate is $2.43 per share on revenue of $1.45 billion for the year ending December 31, 2009.

Jones Apparel Lowers Guidance
Jones Apparel (JNY) said it now expects 2008 earnings of $0.85 to $0.88 per share. The company's previous guidance was earnings of $0.93 to $0.98 per share and the current consensus earnings estimate is $0.90 per share for the year ending December 31, 2008.

Teledyne Technologies Guides Below Estimates
Teledyne Technologies Inc. (TDY) said it expects first quarter earnings of $0.50 to $0.55 per share and 2009 earnings of $2.70 to $2.80 per share. The current consensus earnings estimate is $0.79 per share for the quarter ending March 31, 2009 and $3.47 per share for the year ending December 31, 2009.

Tenet Healthcare Guides Below Estimates
Tenet Healthcare Corp. (THC) said it expects fourth quarter revenue of approximately $2.17 billion. The current consensus estimate is revenue of $2.22 billion for the quarter ending December 31, 2008.

China Agritech Lowers Revenue Guidance
China Agritech, Inc. (CAGC) said it now expects 2008 revenue of approximately $47.0 million. The company's previous guidance was revenue of $54.0 million to $56.0 million and the current consensus estimate is revenue of $54.5 million for the year ending December 31, 2008.

Lockheed Martin Raises Revenue Guidance, but Lowers Earnings Below Estimates
Lockheed Martin Corp. (LMT) said it now expects 2009 earnings of $7.05 to $7.25 per share on revenue of $44.7 billion to $45.7 billion. The company's previous guidance was earnings of $7.65 to $7.90 per share on revenue of $44.25 billion to $45.25 billion and the current consensus earnings estimate is $7.87 per share on revenue of $45.25 billion for the year ending December 31, 2009.

Potash Guides Below Estimates
Potash (POT) said it expects first quarter earnings of $0.70 to $1.00 per share and 2009 earnings of $10.0 to $12.00 per share. The current consensus earnings estimate is $2.05 per share for the quarter ending March 31, 2009 and $12.33 per share for the year ending December 31, 2009.

Sector Watch: Good, Bad & Ugly

Education: Good sector
Shares of ITT Educational Services Inc (ESI) lifted educational stocks on Thursday after the company reported fourth-quarter earnings of $1.61 a share on revenue of $279.8 million, above Wall St estimates of $1.44 a share and $270.7 million in revenue.

Shares rose nearly 11 percent to $126,73. Fellow education provider DeVry Inc (DV) gained 3.3 percent to $63, Corinthian Colleges (COCO) added 5.8 percent to $18.02 and Apollo Group (APOL) tacked on 3.3 percent to $88.33.

Retail Tech: Bad Sector
Major U.S. indexes tumbled on Thursday, dropping after Dow component Microsoft (MSFT) reported quarterly results that missed expectations, and a round of economic data prompted concerns about the impact of the recession on the labor and housing market.

eBay Inc. (EBAY) today reported reported a 31% drop in its fourth-quarter profit, and its first quarterly revenue decline due to one of the worst environments for consumer demand in decades. For the fourth quarter, eBay reported earnings of $367 million, or 29 cents per share, down from a $531 million, or 39 cents a share, a year earlier. Revenue was down 6.7% to $2.04 billion, down from $2.18 billion.

Financials: Ugly Sector
A number of large U.S. regional banks on Thursday said that rising credit losses had led to weaker fourth-quarter results, in an illustration of the breadth and depth of the national credit crisis and recession. Many banks also said they would be cutting jobs in an attempt to lessen the impact of the recession.

Fifth Third Bancorp (FITB), Huntington Bancshares (HBAN) and SunTrust Banks (STI) all posted quarterly losses, while profits fell steeply at BB&T Corp (BBT) and Comerica (CMA).

Citi on Thursday said it expects global corporate earnings to fall an additional 40 percent from current levels, with the biggest falls in cyclical sectors and Japan. "Defensive sectors, the U.S. and Europe should see more moderate falls in profits," it wrote. The firm wrote that current valuations suggest that much of the potential decline was already discounted, but it expects global returns on equity to bottom at about 8 percent in mid-2010.

Retail: Ugly Sector
Phillips-Van Heusen Corp. (PVH) shares dropped 4.3%. The clothing company said late Wednesday it's closing about 175 stores, shutting down its domestic production of machine-made ties and other neckwear and lowering travel, payroll and marketing expenses. Over 10% of the company's salaried workforce, or about 250, and about 150 hourly tie manufacturing positions have been eliminated.

Williams-Sonoma Inc. (WSM) said late Wednesday it will cut 18%, or 1,400 jobs, close its Camp Hill, Pennsylvania call center and a distribution center in Memphis, Tennessee. The retailer said it's also cutting 2009 merchandise inventory, catalog circulation and retail leased square footage growth.

Jones Apparel (JNY) shares fell 8.3%. The owner of Nine West and Jones New York labels said Thursday that profit excluding items for 2008 would drop to 85 cents to 88 cents a share, shy of its previous projection of 93 cents to 98 cents a share. Fourth-quarter results on an adjusted basis were expected to swing to a loss of 3 cents to 6 cents a share.

What Happened In The Market Today...22 Jan 09

What’s Happening In The Market Now...

• Stocks were lower at the open this morning after more disappointing economic data was released. The Commerce Department reported construction of new homes and apartments fell 15.5 percent to an annual rate of 550,000 units last month smashing the previous low set in November.
• The Labor Department reported initial jobless benefit claims rose to a seasonally adjusted 589,000 in the week ending Jan. 17, from an upwardly revised figure of 527,000 the previous week. The latest mark was well above economists' expectations and matched a 26-year high reached four weeks ago.
  
• Adding to investor woes, Microsoft (MSFT) reported its fiscal second-quarter earnings early with an 11 percent drop in profits and said it will slash 5,000 jobs over the next 18 months.
  
• Sectors starting the day out strong include airlines, healthcare facilities, managed healthcare and education services while life & health insurance, motorcycle manufacturing, consumer finance and broadcasting are down.
  
• Volume leaders include Microsoft Corp (MSFT), Interwoven Inc (IWOV), Apple Inc (AAPL), Nokia Corp (NOK) and DryShips Inc (DRYS).

Stocks Most Watched Today
Potash Corp. of Saskatchewan, Inc. (POT), Baidu, Inc. (BIDU), Unitedhealth Group, Inc. (UNH), Comerica Incorporated (CMA), Corinthian Colleges Inc. (COCO), Apollo Group Inc (APOL), BB&T Corp (BBT), Southwest Airlines Co (LUV), Knight Trading Group Inc (NITE), KeyCorp (KEY), WellPoint Health Networks (WLP), Dryships Inc (DRYS), Energy Transfer Partners LP (ETP), CME Group Inc (CME) and Sony Corporation (SNE).

Today’s News Leaders...
Dryships Inc (DRYS), Southwest Airlines Co (LUV), BB&T Corp (BBT), KeyCorp (KEY) and Potash Corp (POT) top the lists of companies with news today.

Analysts Favorites...
Stocks on the list include: Bristol Myers Squibb Co (BMY), Safeway Inc (SWY), Zimmer Holdings Inc (ZMH), Sanofi Aventis (SNY) and Netflix Inc (NFLX).

ETFs and HOLDRs Covered Today...
Consumer Discretionary Select SPDR Fund (XLY), Vanguard REIT ETF (VNQ), United States Oil Fund LP (USO), iShares Russell 1000 Growth Index Fund (IWF) and Technology Select Sector (XLK).

Tip of the Day...
Set a course and stick to it. Determine your goals and time horizon then formulate a plan to get there. Use whatever means necessary but once you have a firm plan, stick to it. Don't try to chase results. All you might get are lots of brokerage fees and falling profits.

Source: MarketIntelligenceCenter.com

How 50-Day Moving Average Keeps You A Disciplined Trader

Successful stock traders need to be extremely disciplined. Every trader should prepare a set of rules and abide by it. Everytime you stick to the rules you set, better chances of success. However most traders succumb to greed/fear and end up breaking their own rules resulting in failures. One of the rules i have set for myself is to never go short once a major resistance is broken and never go long once a major support is broken. Quite simple...eh ? But hard to follow most of the times.

I believe 50-day moving average (dma) and 200-day moving average are two pivotal values. Let us look at some charts to see how valuable these moving averages turn out to be.

First chart is the IBM chart. The blue line represents the 50 dma and the red line represents the 200 dma. If you look closely, during the month of Sept-Oct 08, IBM stock tried to break the 50 dma but wasnt successful. This is because 50-dma provides a strong resistance when stock price is below it and similarly provides a strong support when stock price is above it. All the way till Dec 08, IBM was way below 50-dma. Mid-Dec it tried to break the 50-dma on the upside. It failed for the first time, but second time it did break it. Now in early Jan 09, 50-dma become a strong support and caused the stock to bounce back from it.


Second chart is the ERTS chart. See how the 50-dma has provided strong resistance to the stock. In early Dec-08 and early Jan-09 the stock tried to break on the upside of the 50-dma, but failed miserably.


Third chart is the AAPL chart. See how the 50-dma has provided strong resistance to the stock. It has a similar story to tell. Can it break the 50-dma on the upside ?


Fourth chart is the CTX chart. CTX has had an interesting ride. In early Oct-08 the stock broke on the downside. Once it dropped below the support line of 50-dma, there was no stopping. It could not recover soon. Early Nov-08 the stock tried to break the 50-dma resistance but failed. Eventually in early Dec-08 the stock broke the resistance and has since been above the 50-dma, which now has provided excellent support to the stock. However recently it looks like its going to break on the downside of 50-dma which become a resistance line.

The key rule/lesson to take away from these charts is

• To keep an eye on the moving averages.
• To avoid shorting a stock that breaks a major resistance like the 50-dma.
• To avoid going long a stock that breaks a major support like the 50-dma.

Stick to the rules and you will be on the winning side more and more....

What Happened In The Market Today...

What Happened In The Market Today...

• The market opened on a positive note after yesterday's historic drop.
  
• The British pound was battered again amid fear about that nation's ailing banks and the government's costly efforts to assist them.
  
• Most overseas stock markets fell as financials declined overseas, echoing the drop seen in the U.S. Tuesday.
  
• Investors watched Timothy Geithner's Senate confirmation hearing for Treasury Secretary looking for clues to his ideas for a recovery.
• General Motors (GM) sold fewer cars globally than Toyota (TM) last year, as the Japanese automaker passed the Detroit company for the first time.
  
• Sectors starting the day out strong include asset management, financial services and banks while aluminum, apparel, construction & engineering and industrial conglomerates are down. Volume leaders include Bank of America Corporation (BAC), Citigroup Inc (C), Wells Fargo and Company (WFC), General Electric Capital Corp (GE) and JPMorgan Chase & Co (JPM).

Stocks Most Watched Today
Google Inc. (GOOG), Walt Disney Co. (DIS), AMR Corporation (AMR), SPX Corporation (SPW) and Hanesbrands Inc. (HBI), International Business Machines Corp (IBM), Abbott Laboratories (ABT), Packaging Corp (PKG), LM Ericsson Telephone Company (ERIC), TD Ameritrade Holding Corporation (AMTD), Riverbed Technology Inc (RVBD), Coach Inc (COH), UAL Corporation (UAUA), Regal Entertainment Group (RGC) and Allegheny Technologies Inc (ATI).

Today’s News Leaders...
International Business Machines Corp (IBM), LM Ericsson Telephone Company (ERIC), AMR Corp (AMR), Coach Inc (COH) and Walt Disney Co (DIS) top the lists of companies with news today.

Analysts Favorites...
Apple Inc (AAPL), Bed Bath and Beyond Inc (BBBY), Cardinal Health Inc (CAH), Caterpillar Inc (CAT) and Kohls Corporation (KSS).

ETFs and HOLDRs Covered Today...
Utilities Select Sector (XLU), iShares Nasdaq Biotechnology Index Fund (IBB), ProShares Short Dow30 (DOG), iShares Russell 2000 Value Index Fund (IWN) and SPDR Gold Trust (GLD).

Tip of the Day...
Set a course and stick to it. There are a number of online financial calculators out there. Try a few until you find one that works for you and use it to determine the correct mix of cash, bonds and stocks for your specific goals. Use this information to help you make the right moves to keep that mix in balance.

Earning News - 21st Jan 09

Williams-Sonoma Provides Inline Guidance
Williams-Sonoma, Inc. (WSM) said it expects fourth quarter earnings to be at the low-end of its previous guidance range of $0.10 to $0.30 per share, even after factoring in a new one-time charge of approximately $0.08 to $0.09 per share. The current consensus earnings estimate is $0.16 per share for the quarter ending January 31, 2009.

Phillips-Van Heusen Provides Mixed Guidance
Phillips-Van Heusen (PVH) said it expects fourth quarter earnings of $0.25 to $0.30 per share on revenue of $585.0 million to $590.0 million. The company's rpevious guidance was earnings of $0.35 to $0.45 per share and the current consensus earnings estimate is $0.36 per share on revenue of $576.9 million for the quarter ending February 1, 2009.

Apple Provides Guidance
Apple Inc. (AAPL) said in an SEC Filing it expects second quarter earnings of $0.90 to $1.00 per share on revenue of $7.60 billion to $8.00 billion. The current consensus earnings estimate is $1.12 per share on revenue of $8.20 billion for the quarter ending March 31, 2009. The whispered expectations for guidance were for earnings of $0.80 to $0.90 per share.

Darden Restaurants Reaffirms
Darden Restaurants (DRI) said it continues to expect 2009 earnings of $2.40 to $2.52 per share, including the benefit of a 53rd week. The current consensus earnings estimate is $2.53 per share for the year ending May 31, 2009.

F5 Networks Guides Inline
F5 Networks Inc. (FFIV) said it expects second quarter non-GAAP earnings of $0.36 to $0.38 per share on revenue of $157.0 million to $164.0 million. The current consensus earnings estimate is $0.37 per share on revenue of $162.6 million for the quarter ending March 31, 2009.

NETGEAR Narrows Guidance
NETGEAR Inc. (NTGR) said it now fourth quarter revenue of $155.0 million to $160.0 million. The company's previous guidance was revenue of $155.0 million to $165.0 million and the current consensus estimate is revenue of $157.2 million for the quarter ending December 31, 2008.

SPX Guides Inline
SPX Corp. (SPW) said it expects 2009 earnings of $5.40 to $5.80 per share on revenue of $5.30 billion to $5.60 billion. The current consensus earnings estimate is $5.56 per share on revenue of $5.59 billion for the year ending December 31, 2009.

Abbott Labs Reaffirms
Abbott Laboratories (ABT) said it continues to expect 2009 earnings of $3.65 to $3.70 per share. The current consensus earnings estimate is $3.66 per share for the year ending December 31, 2009.

United Technologies Reaffirms
United Technologies Corp. (UTX) said it continues to expect 2009 earnings of $4.65 to $5.15 per share. The current consensus earnings estimate is $4.78 per share for the year ending December 31, 2009.

Natural Resource Partners Guides Below Estimates
Natural Resource Partners (NRP) said it expects 2009 earnings of $1.67 to $2.12 per share on revenue of $294.0 million to $338.0 million. The current consensus earnings estimate is $2.40 per share on revenue of $352.7 million for the year ending December 31, 2009.

Koppers Sees Fourth Quarter Loss
Koppers Holdings Inc. (KOP) said it expects a loss from operations of $14.0 million to $12.0 million. The consensus estimate is for earnings of $0.16 per share for the quarter ended December 31, 2008.

eBay Guides Below Estimates
eBay Inc. (EBAY) said it expects first quarter earnings of $0.32 to $0.34 per share on revenue of $1.80 billion to $2.05 billion. The current consensus earnings estimate is $0.40 per share on revenue of $2.10 billion for the quarter ending March 31, 2009.

Charlotte Russe Guides Below Estimates
Charlotte Russe Holding (CHIC) said it expects a second quarter loss of $0.20 to $0.10 per share. The current consensus estimate is a loss of $0.06 per share for the quarter ending March 31, 2009.

Amdocs Guides Below Estimates
Amdocs Ltd. (DOX) said it expects second quarter earnings of $0.47 to $0.51 per share on revenue of $700.0 million to $720.0 million. The current consensus earnings estimate is $0.52 per share on revenue of $793.9 million for the quarter ending March 31, 2009.

Seagate Technology Guides Below Estimates
Seagate Technology (STX) said it expects third quarter revenue of $1.62 billion to $2.00 billion. The current consensus estimate is revenue of $2.19 billion for the quarter ending March 31, 2009.

PNC Financial Services to Miss Expectations
PNC Financial Services (PNC) said it expects to report "a meaningful profit for the fourth quarter but below the company's expectations". The current consensus earnings estimate is $1.01 per share for the quarter ending December 31, 2008.

Roubini Predicts U.S. Losses May Reach $3.6 Trillion

Bloomberg has a shocking story on Roubini's prediction for US losses: Roubini Predicts U.S. Losses May Reach $3.6 Trillion

U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.

......

“If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis.”

Losses and writedowns at financial companies worldwide have risen to more than $1 trillion since the U.S. subprime mortgage market collapsed in 2007.

President Barack Obama will have to use as much as $1 trillion of public funds to shore up the capitalization of the banking sector, following the $350 billion injection by the Bush administration.

......

Bank of America Corp., the largest U.S. bank by assets, posted a quarterly loss of $1.79 billion. Citigroup Inc. posted an $8.29 billion fourth-quarter loss.

.....

Oil prices will trade between $30 and $40 a barrel all year, Roubini predicted. I see commodities falling overall another 15-20 percent,” Roubini said.

.....

As seen in the USO chart, oil prices have been in a free fall. Every little rally is getting sold into. Lets see if it stays in the trading range as predicted by Roubini.

Banks have been in a absolute free fall and rightly so look effectively insolvent.



Roubini has been right on many many occasions and i have no reason to believe he is wrong this time too.

Short Picks For 20th Jan

Rumors are swirling over what Palm (PALM) will charge for its new phone, the Pre. Though it seemed Palm was planning to charge over $199 that AT&T and Apple charge for the iPhone, or possibly $399 on Sprint's network, Palm is tentatively planning to charge $399 or $499 without a contract and $149 or $199 with a contract. The stock has taken a big jump, up 200+% in the last month. Wait for the reversal and the news the die down before shorting it.


MFLX is sitting right at its 200 day moving average (DMA). All indicators point to overbought stock. However 200 DMA holds the key here. If it can break it convincingly, it can keep going higher. Ideal scenerio is to short around 17.4$ area, but put a stop loss to cover above 18$. Its board of directors has approved a share repurchase program for up to 2,250,000 shares which represents approximately 9%. Stock buy backs are not always good since company is burning capital over preserving for weaker times.



AMMD is up last 6 consecutive days and looks to be in an uptrend. Wait for the reversal. Health care related stocks are bit dangerous to short into since fundamentals are with them. Nonetheless overbought stocks are eventually sold making short selling an attractive proposition here.

CYPB shares surged 33 percent after the San Diego-based company and its partner Forest Laboratories Inc. said Wednesday that the Food and Drug Administration approved the fibromyalgia treatment Savella. This is not a stock you want to short. Biotech stocks dont move with the market. They move with FDA approval which is risky business. Stay away.

CECO looks to have broken out of its $21 resistance which would have been double top otherwise. This could possibly be bullish sign. However it has been up 50% in the last 3 months and 10% in the last 5 days. I would wait for the reversal to short into.


SEPR is another bio-tech stock that has been on a high rise. Its has been up 27% in the last month and 11% alone in the last week. This kind of run always need a halt and provides opportunity for scalping on the short side. Notice how after every spike up it has met with a similar spike down. I expect the same. Keep watching. RSI and MFI points to overbought levels.



ARST is up 37% in the last month. Time to short ? Not really. Their Q2 revenues rose 33%. Earnings reached 6 cents per share versus a loss of 3 cents a year prior. Brokerage analysts had forecast the company to break even. Strong earnings is a key indicator of how well the company is doing. Why short a profitable company when there are many crappy ones out there. I will pass this one.

WNR just broke the 200 DMA. Even though indicators show overbought, i wont consider shorting it until it falls back below 200 DMA. Adding to watch list though.

SMBL broke out of its strong 7.5$ resistance as well as the 200 DMA. Its amazing how once it breaks the 200 DMA it stays above it and keeps pushing higher. Adding to watch list for now.

SVU is a retail grocer that is up 37% in the last month. It dropped from 19$ to 16$ range very fast. Now its making its way to 19$ again. If it cant break it, i see it dropping back to lower levels. RSI and MFI both indicate overbought condition. Keep a close eye on this one.

PFWD is another stock marching towards its 200 DMA. Lets see if it breaks it or not.

CONN is a specialty retailer of home appliances and consumer electronics that is up 53% in the last month. How long can this keep going up ? Waiting for 14+ prices to short into. With consumer spending dying down, retailers make for good shorts.

CAL is air carrier engaged in the business of transporting passengers, cargo and mail. It has a beautiful predictable chart. Crazy upswings has followed by wild downswings. Wait for the chart to turn red and watch how it will keep falling. You dont need to catch the exact top, but you can enjoy the ride down. Definitely worthy short candidate.


Disclosure: No positions held in the above stocks.

Financial News Over This Week

Aggregator Bank ??
The heads of the U.S. Treasury Paulson and Federal Deposit Insurance Corp Sheila Bair gave momentum to the idea of a new government-backed bank to remove toxic assets from lenders’ balance sheets. A lot of work has been done on an aggregator bank and other ways of using the $700 billion financial-rescue fund to let it go further when it comes to dealing with illiquid assets, Treasury Secretary Henry Paulson told reporters today in Washington. FDIC Chairman Sheila Bair praised the idea in an interview on CNBC, saying it might have “some merit.”

Citigroup Splits Into Two After Losing $8.3 Billion
Citigroup, scrambling to survive losses triggered by the credit crunch, unveiled plans to split in two and shed troubled assets, and reported a quarterly loss of $8.29 billion. The banking giant also said it expected more departures from its embattled board, which is losing former Treasury Secretary Robert Rubin as a director later this year.

Over 8 in 10 corporations have tax havens
Eighty-three of the nation's 100 largest corporations, including Citigroup, Bank of America and News Corp, had subsidiaries in offshore tax havens in 2007, and some of the companies received federal bailout funding, a government watchdog said Friday. The Government Accountability Office released a report that said Bank of America Inc., Citigroup Inc. (C) and Morgan Stanley (MS) all had more than 100 units in countries that maintain low or no taxes. The three financial institutions were included in the $700 billion financial bailout approved by Congress.

Rescue of U.S. banks hints at nationalization
Last fall, as Federal Reserve and Treasury Department officials rode to the rescue of one financial institution after another, they took great pains to avoid doing anything that smacked of nationalizing banks. They may no longer have that luxury. With two of the nation's largest banks buckling under yet another round of huge losses, the incoming administration of Barack Obama and the Federal Reserve are suddenly dealing with banks that are "too big to fail" and yet unable to function as the sinking economy erodes their capital.

Deflation concerns grow as consumer prices shrink
Consumer prices tumbled yet again in December, and inflation last year logged its smallest advance since the early 1950s, fanning new fears that the country may face a dangerous bout of deflation.

Inflation slows to half-century low in 2008
Inflation slowed to a half-century low last year and industrial output fell for the first time since 2002, data showed on Friday, as the recession deepened toward year-end, raising the specter of deflation. With consumer confidence remaining at depressed levels, the reports suggested the economy could take longer to pull out of a downturn that is on track to be the longest and possibly deepest since World War Two. "We seem to be digging an economic hole of major proportion which will only add time to the turnaround," said Kevin Giddis, head of fixed-income sales, trading and research at Morgan Keegan in Memphis, Tennessee.

Hertz to cut more than 4,000 jobs
Hertz Global Holdings Inc said on Friday that it would cut more than 4,000 jobs in a worldwide restructuring through the first quarter due to falling demand, and the car rental company's shares fell nearly 9 percent. Hertz expects annualized savings of $150 million to $170 million in 2009 from the job cuts, it said. It expects to take a fourth-quarter charge of $20 million to $25 million for the cuts. The cuts are in the car and equipment rental businesses as well as in corporate and support areas in all regions focused on positions that do not have direct contact with customers, Hertz said in a statement. Hertz will have cut its workforce by 32 percent since August 2006 with the latest round of reductions, it said.

Circuit City to liquidate remaining US stores
Bankrupt Circuit City Stores Inc., the nation's second-biggest consumer electronics retailer, said Friday it failed to find a buyer and will liquidate its 567 U.S. stores. The closures could send another 30,000 people into the ranks of the unemployed. "This is the only possible path for our company," James A. Marcum, acting chief executive, said in a statement. "We are extremely disappointed by this outcome." The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable.

Arabs lost 2.5 trillion dollars from credit crunch: Kuwait
Arab investors have lost 2.5 trillion dollars from the credit crunch, Kuwaiti Foreign Minister Sheikh Mohammad al-Sabah, whose country hosts an Arab economic summit next week, said on Friday.

"The Arab world has lost 2.5 trillion dollars in the past four months" as a result of the global financial crisis, Sheikh Mohammad told a press conference following a joint meeting of Arab foreign and finance ministers in Kuwait.

He also said that about 60 percent of development projects "have either been postponed or cancelled" by the six-nation Gulf Cooperation Council (GCC) states because of the global meltdown.

Trading Psychology

Trading History

2005 Newbie to trading, I was a buy and hold investor

2006 Understanding fundamentals better, I continued being a buy and hold investor

2007 With credit crisis on the horizon, buy and hold didn’t work and I focused strictly on day/swing trading

2008 With recession strongly underway, I focused on companies that made for good shorts and kept shorting any potential pops

2009 With mixed markets and no clear edge, I focused on micro-caps and penny stocks since I realized this is where retail investors have better chance of profiting. Hedge funds and large institutions stay away from micro-cap and penny stocks due to its scalability issues which is actually positive for retail investors

Trading Strategy
I look for stocks that have gone parabolic/supernova…and wait to short them on the sell off.

Trading Rules
Rule #1: Play stocks with market capital less than 600 million. (Micro-cap and penny stocks)

Rule #2: Never never ever short a stock into strength, but rather into weakness

Rule #3: Never never ever short a stock on its first spike up day, otherwise get ready to be squeezed

Rule #4: Not all stocks make up for good shorting, especially ones that report good earnings or get big contracts

Rule #5: Wait for the parabolic stock to start selling off (go below yesterday’s close) to short into or starting to show signs of weakness

Rule #6: Fading volume indicates parabolic stock running out of steam and potential for short selling