Monday, April 30, 2007

Earnings in prevew, stocks tumbled !

CTX and VMC both are scheduled to post their earnings tomorow near midday.
My current highlight is CTX which is already expected to post a loss of average 3 cents per share.

The housing sector is battered very bad, with the big homebuilders posting a loss. The March housing sales data also did not come out good. Existing homes divedd 8.4% in March, their fastest decline in 18 years, while new-home sales increased 2.6% for the month.

Vulcan Material Inc, (VMC) in the otherhand is trading higher during the trading sessions. Many speculators expect a wonderful earning by VMC. But the stock currently trading lower around 117.00, down 6.67 or more than 5% in after hours. The open interest is hefty on both put and call. I'd like to see how they are doing tomorow on lunch hours.
However they are more likely to go lower prior to the movement in AH.

The last day in April also haven't been greeted cheerfully by the stock market. Three indices closed lower. However the big loser today is the Nasdaq.
The nasdaq closed lower as much as 32 points followes by Dow and the S&P.

The European stock market also hinting for a downturn, as roused by the Turkey Index which fell around 6% due to the presidential election issue.

I am expecting another drop of 100 - 200 points by the Dow to call it a consolidation.

Friday, April 27, 2007

20% profit in a few hours !

I decided to exit my COO trade despite the price target of $52.
The option .COOEJ COO May 50 Call Options has reach $2.4, a 20% in a few hours.

Definitely not bad ! I traded this one out for quick profit because I don't want to hold anything through weekend.

The market looks undecided, well unless we are turning for consolidation I dare not to put myself in the long side now.

Happy weekend everyone !

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My stock pick for today !

This is my trade for today. I opened a position in Cooper Companies Inc. (COO).
I purchased COO May 50 Call Options COOEJ for $2.

COO has been uptrending since mid March. The stock did a pullback and bounced the 49 line. My price target is COO around $52.

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Thursday, April 26, 2007

AAPL earning exploded.

As predicted by several traders. Apple (AAPL) earnings topped analyst expectations by 23 cents per share.
AAPL second-quarter profit grew 88 percent to 87 cents per share, and revenue increased 21 percent to $5.26 billion, most of this increase were contributed by wonderful sales of iPod media players and macintosh.

Analysts polled by Thomson Financial expected 64 cents per share in profit and $5.17 billion in sales.

Analyst from Bear Stearns said "We see the Apple story shifting from a dependence on one 'hit' product with little sense of what could follow and when, to a broader array of products with multiple drivers and a sense of what is down the road".

AAPL shares look set to follow the Dow to set foot into all-time high, in after hours AAPL rose to around $104, from yesterday closing price 95.35.

However AAPL started to going down slowly in the trading hours. From its day high at 102.50 to 100.00.

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Wednesday, April 25, 2007

Stepping over 13.000 Nicely !

Stocks opened higher as investors were fueled with some better than expected earnings reports and encouraging economic data.

Boeing opened nearing its 52 week high after exceeding expectations led the Dow today. March durable goods also posted rising 3.4%, which is stronger than expected.

Anazon - AMZN did wonderful today. Its Q1 Profit were doubled and management raised its full year out look. Right on, several analyst upgraded Amazon and the stock really flew today ! Near closing bell AMZN traded as high as 56.32. That's a 25% increase from today opening !
AMZN helped nasdaq to lock higher.

Alcoa Inc. (AA) also posted great earning which helped the Dow to break its tight trading range during mid-day.

The Dow is at all time high and S&P at its 6 1/2 years high both indices continously to post gains. Stocks are also continously posting new high. Bad stocks suddenly turned good, good stocks went to its 52 week whatever high. Even with such conditions, I still call for a sharp pulback soon.

Perhaps the S&P will be pulled to reach its all time high before pullback, or we might see it sooner.

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Stocks lead Dow blew 13.000 !

Stock market surged and lead the Dow has just passed 13.000 area and went up around 13.028 area.
As I posted earlier, it quickly retraced down.

We have home sales data due 10.00 AM EST. Those data can be the one that set the sail toward today trading.

Analyst is expecting 890K in new home sales, exceeding prior data of 848K.

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Dow inching toward the 13.000 area

The USA Stock Market closed mixed yesterday. One of the most notable is the Dow, which managed to go up by 34.54 points. However it was alarmingly up to 12.989 area before retracing down slightly. Many day trader would speculate the Blue Chip stock here to go up with the Dow to touch the 13.000 area.

Although the S&P, Russell and NASDAQ did a side way move, the Dow didn't seem to fond of a side way move. The Dow slowly wants to touch the 13.000 line. From the last Friday rally, The Dow has been making a NEW HIGH everyday.

Since we are already at overbought position, a pullback is LIKELY to happen (although that does not mean it will CERTAINLY happen). We are on a stage of euphoria here, all bad news are nothing and all good news are wonderful news.

The S&P and Nasdaq didn't seem to move in sync with the Dow this week. Both indices continuously making lower high and lower low.

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Tuesday, April 24, 2007

Is the Stock Market sinking or flying ?

This week is the last week of April. We'll see whether the Old wall street saying "Buy in April and Go Away in May" will apply to this final week. We already see the "buy in April" part but a significant pullback is yet to happen.

A possible scenario for the Dow is to pullback slightly to around 12.700 and rebound back to test the 13.000 area. But will a pullback ever happen ?

It all depends on the set of heavy weight economic data released this week.

Today we have Consumer Confidence and Existing Home Sales data due. If the existing home sales is bad then coupled with bad new home sales data tomorrow then it will add further pressure toward the slumping housing sector.

Other datas due out this week include: GDP, Employment cost index, Fed's Beige Book and others. If market wants to pullback here, it will find excuse and reasons from those datas.

Other than those datas, several companies will release their earnings report this week. AAPL, MSFT and CVX are the highlight this week. Failure to "impress" the investors coupled with not so great data can be a reason to profit taking in the market.

We are seeing also a negative divergence of price vs RSI and TSV in the Dow weekly chart.

12.890 seems to be a strong support there, so yesterday move was not really significant. Let's see what today brings.

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GOOG and CAT fueled weekend rally on stock market!

GOOG and CAT both reported superior earnings last friday. GOOG kicked it off earlier by beating analyst expectation by $0.38. CAT followed through by showing wonderful earnings too. And market galloped it all, the Dow opened and surged to around +120 points directly from the start.

Shares of GOOG and CAT both gapped up fueled the market surge. Not forgetting also MCD that also contributed toward the rally by showing good earnings. However GOOG and MCD did not manage to go higher than their opening on Friday. Both stocks sinked slowly as trading hours went by. GOOG still managed to stay above Thursday's closing price, but MCD failed.
Stocks rally on Friday also fueled by the rally that Shanghai Composite did, Shanghai Composite almost erased most of Thursday loss. It's strange how the market gobbled up the positive news and ignored the negative news.

However I still reckon that we are very overbought and we are due to a pullback soon. Dow might closed on all time high but it is now facing a strong wall at the 13.000 points. A healthy correction is neccessary before we try to breakthough that levels.

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Thursday, April 19, 2007

Another solid ground for Dow

The indices managed to hold their ground despite the sell off that happened in Asia earlier today.
With the Asia sell off, Europe and USA still held strong and ended today in flat area.

The Nasdaq ended up being lower by just a mere 5.15 points, while the S&P ended lower by 1.77 points.
The alter effect of YHOO still linger and dragged the Nasdaq lower.

What the market today was more a indecisiveness than a consolidation move. Let's see whether the market breaks the yesterday high and close it there or ended up in a correction.

The more the market rise without a pullback, the harder the pullback will be. We have been rising without significant pullback, and I would like to see one before I start buying the dip into the next bull leg.

After hours activities highlight GOOGle earning release. GOOG did well by exceeding analyst estimation. GOOG reported 3.68 EPS vs analyst' 3.30 EPS. Stock is up as much as $10 from the day close of 471.65.

Let's see whether GOOG earning will drag the futures up significantly tomorrow.
I personally think that the three DOW and S&P members: Catterpillar INC (CAT), Pfizer Inc (PFE), and Mc Donalds Corp. (MCD), will set the tone to the futures trading tomorow. All will release earning before market open and should set the sail for early hours.

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18 April 2007, EOD market commentary

The Dow extended its gain yesterday. After moving up more than 300 points in 5 days, the Dow finally broke a new record high intraday yesterday.
However even with the record breaking that happened yesterday, I could not hide my suspicion that we are due to a correction soon.
As seen at this chart,

We are at the top of the bollinger band as well as the top of the small channel. The dow is overbought now and a pullback to the middle of the bollinger band is essential toward the continuation of the bull trend.

The record breaking that Dow did yesterday was contributed by just a few companies. JP Morgan Chase & Co., Boeing Co. and Caterpillar Inc all posted great earnings exceeding analyst expectation. However there were more decliners than advancers yesterday. The Nasdaq composite index was lagged by bad earning from Yahoo and IBM.

Yahoo was down as much as 11.78% and IBM 2.38% weighted the Nasdaq to go higher.
The bull euphoria these past 5 days might end soon, as right now the Dow futures is trading about -70 point below fair value. Another sign is given from China, Shanghai Index went down as much as -4.5%. This is their biggest drop in many weeks.

That drop can lead to a sell off, like it did on late February. Well the odds right now belong to the bear for a pullback. Let's see whether this pullback lead to a sell off or just a continuation of a bull market.

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