Thursday Morning, August 30th
Dow Stock News
Dow Jones News:
Microsoft Corp. (MSFT) said Wednesday it will buy a small Chicago-based technology company and add its group-chat software to a broad vision for integrated office communications programs. - MarketWatch
Ice Man Stocks
Breakouts the Ice Man may consider trading:
GLDN - 70.75
SYNA - 42.75
BPHX - 15.50
Regular Trades the Ice Man may consider:
RACK - 13.06 Bid, 14
BTK - 40.40 * Best Bet
MIND - 19
QSFT - 15.75
SLV - 119.20
AGYS - 17.15
MCO - 46.70
APH - 36
AET - 50.60
HANS - 45.10
ISRG - 216.25
MRO - 54
IVAC - 16
MCRL - 10.85
VSH - 13.10
SIMO - 20
AMD - 12.35
MHK - 87.50
DBRN - 18
XTO - 53.75
UWM - 70
INTC - 25.20 = 26.20
IBM - 115
LVS - 102.25
GSF - 70
Dollar Man Ideas:
LOCM - 5.80
AVNR - 2.25
EMMS - 6.50
BQI - 5.50
Media Commentators
Cramer's Comments:
Spotting a Bottom: Look for market sentiment to be bad, and second look for Mutual Funds to start pulling out of the market. Finally there is normally a catalyst.
Spotting a Top: When bears start disappearing and all the analysts covering a stocks have upgraded it. Secondly, competition is another factor that can add to a top in a stock and a reason why your homework must include the industry and not just the stock. Another time to sell no matter what is accounting irregularities and overexpansion. Finally the last sign of an impending top is government action which can hurt a company more than any competitor.
Be aware of cyclical and secular stocks. If you think the market is near a top you want to load up on secular stocks (companies tend not to be too sensitive to the overall economy) and if you think the market is near a bottom you buy the cyclical stocks (stocks levered to the growth of the economy)
To figure out earnings you need to either visit the stores at different times and see if the products are selling better than expectations or anticipate spending cycles.
One other note to anticipate earnings is to start at the bottom. If BA gets a lot of contracts you buy Fairchild, BE Aerospace, and Honeywell and when analysts upgrade these names you get out.
Zanger's Notes:
Hello out there stock fans. Today we saw an almost complete reversal of yesterday's action as this market continues to amaze everyone in this new era of market volatility. Let's see what the charts have in store for us as though they really know in this new age of wild market action.
SPX - pattern can lead mugh higher
AAPL - above 136 leads to 140
RIMM - Buy point above 85
GRMN - Buy point above 105 on heavy volume
BIDU - buy point is new highs above 217
ACH - High risk, but a few days sideways and then new highs with volume should lead higher
OIH - Looks higher right here
NOV - news highs are a buy but needs more basing ideally
DRYS - looks higher from here if the market stays strong
CROX - new highs are a buy but needs more sideways
GOOG - Buy point is 517 on volume
Ice Cold Commentators
Break Man Video Summary:
Break out buy (or short sell) watch list for short term gains August 30 includes: MNTG, AACC, ALKS, ISLN, AAV, AMSC, GHS, ORBC.
Several candidates for break out or short sell plays for at least short term gains by buying the break out (or selling the break down) on good volume and closing at least some on the first day.
CNBC Fast Money Review
User´s Guide Volume 3: ETFs
Is the SPY, DIA, QQQ are good way tot trade the market?
Macke: all are liquid enough for real trading and liquidity is a big issue in ETFs
Bolling: it´s a great way to get in without worrying about picking certain stocks, you could do your homework and then buy a stock when you think the market will rally but for some reason or another is doesn´t go and you miss a great market call; also look at some of these ETFs play dividends
Najarian: After the top ten or so the liquidity becomes a major issue
Adami: these three are extremely liquid and a great trading vehicle
RTH:
Macke: I like this but it is heavy WMT and HD (over 30%). If you wanted to get long retail with out WMT you can buy the RTH and short WMT (since WMT is 16% of the index you would short $1.60 worth of WMT for every $10 of RTH you buy)
IYT:
Adami:if I ever believe the economy is turning, I look to the IYT and I buy especially since airlines is only 11%.
XLF:
Najarian: I love this one especially because it has equal distribution throughout the various financial sectors
USO, OIH, XLE:
Bolling: USO is a great way to trade strictly oil prices and tracks closely, XLE is a way to play the broad energy market, and the OIH will let you specifically invest in companies that take oil out of the ground in oil service stocks
XLK - Digital Revolution:
Macke: this index is decent but not perfect. It does have a lot of the names we have been talking about and can give you exposure in one place
Najarian: Not liquid at all
GLD, SLV, XLB:
Bolling: as these things are announced, the fund has to go out and actually buy the metal as the ETF trades which causes a huge spike in the metals themselves. If you hear an ETF will be announced or think one makes sense then going long the metal makes sense.
PPH: Pharmaceutical
Najarian: I love this one and has liquidity
XHB:
Adami: Don´t like this one, it is not really a play on homebuilder Index because of the companies in the index. Actual home building names are not represented
Global ETFs:
FXI & ways to play Asia:
Bolling: 25 biggest Chinese ADRs make up the FXI and it is a great way to play China. You can also look at the PID which is a global dividend ETF and is more defensive
Najaraian: Love the liquidity
Adami: I like the EWT
Europe:
The German EWG:
Najaraian: I love it, Germany is importing to most of the emerging markets and is a great way to play
Macke: I like EWJ for a long term play - which is Japan and really didn´t fit when he said it
Commodities: Latin America
Bolling: The ILF is the best way to play the broad South American market
Russia:
NO ETF
Bolling: There will be a Russian ETF someday but now most of the assets are centralized in a few stocks, the EEM can get you some exposure
Face 2 Face:
How can I get long Gas prices with an ETF?
Najaraian: the PXE will give you exposure to refiners and if gas prices are up they will do well
How can I get long Soft Commodities with an ETF?
DBA: Great ETF for an agricultural play although its not exactly a soft commodity play it is close enough to what you are looking for
How to play the falling dollar?
Adami: to play vs. the Yen you can buy the EWJ or DFJ, but to play the potential drop in the dollar from a rate cut you could buy the XLF
Bolling: DBB is a basket of currencies against the dollar butr be careful because some of the weightings are off, and the FXE is a way to play Europe vs. the dollar
Final Trade:
Macke: EWA (Australia)
Najarian: PXE (Gas)
Adami: EWG (Germany)
Bolling: DVY and PID (dividend plays)
News and Events Digest
Breaking News
Rio Tinto Ltd. (RTP) said Thursday it has completed syndication of a US$40 billion loan that will fund its takeover of Canada's Alcan Inc. (AL) and plans to refinance some of the debt through a bond issue. - MarketWatch
Media Digest
By Friday Banks must mark their assets to market;
Some interesting Gold data.
Analyst Adrian Douglas, pointed out in Le Metropole Cafe that there is some very interesting data in the current gold options data. "In the October contract the largest PUT Open Interest is 5016 at strike $650. The largest CALL OI is 6696 at Strike $700. Looking at December contract the largest PUT Open Interest is 10060 at strike $600. The largest CALL OI is 19679 at Strike $800. There are also CALL OI of 18598 @ $700, 11285 @ $850, 3935 @ $900 and 7161 @ $1000."
He explains that it is "absolutely stunning that the CALL Open interest in December Strike $1000 exceeds the OI in October Strike $700. It is also very significant that the largest position is $140 higher than the price today. It is not Joe & Jane six-pack who buy gold options. This is a way for serious money to get a big position in gold without blowing the roof off the price when they purchase. If the price moves into the strike price the options can be exercised for futures contracts or gold bullion."
Stock Split Announcement:
Deere & Company (Ticker: DE) announced that its board of directors approved a 2 for 1 stock split.
Economic Data:
8:30 GDP
8:30 Initial Claims
10:00 Help-Wanted Index
Upgrades and Downgrades by Sector:
Biotech
ANDS Anadys Pharma Cowen & Co Downgraded from Outperform to Neutral
Brokerage Services
BSC Lehman lowers price targets on BSC ($142), GS ($214), MER ($106), and MS ($81) Cut Price Target
Business Services
TTEC TeleTech Matrix Research Upgraded from Sell to Hold
Chemicals-Ethanol
AVR Aventine Renewable Energy Lehman Brothers Upgraded from Equal-weight to Overweight
VSE VeraSun Energy Lehman Brothers Upgraded from Equal-weight to Overweight
Computer Hardware
RACK RACK - checks are improving and a near term recovery seen for shares at RBCM Recovery
HTCH Hutchinson Brean Murray Price Target Raised Hold $22 to $24
SIGM Sigma Designs BWS Financial Price Target Raised Strong Buy $40 to $70
SIGM Sigma Designs Roth Capital Price Target Raised Buy $42 to $50
STX Seagate Tech UBS Price Target Raised Neutral $27 to $28
Computer Services
CHINA CDC Corp JMP Securities Initiated at Mkt Outperform $10.50
CHINA CHINA - initiated with an Outperform at JPMS Initiated
Finance Companies
UNCL MRU Holdings Roth Capital Initiated at Buy $8.50
CFC Countrywide Credit Suisse Cut Price Target Outperform $40 to $28
Healthcare
OSCI Oscient Pharma Piper Jaffray Initiated at Outperform
LH Laboratory Corp Cowen & Co Upgraded from Neutral to Outperform
Household Goods
SCSS Select Comfort Matrix Research Downgraded from Hold to Strong Sell
Industrial Equipment
JOYG Joy Global Stifel Nicolaus Upgraded from Hold to Buy $68
JOYG JOYG - price target lowered to $55 at Bank of America but reiterate Buy Cut Price Target
JOYG Joy Global UBS Cut Price Target Buy $60 to $55
Manufacturing
TASR TASER Merriman Curhan Ford Upgraded from Neutral to Buy
Mfg - Wires, Cables
CCIX Coleman Cable BB&T Capital Mkts Initiated at Buy $22
Multi-National Banks
GGAL Grupo Financiero Galicia JP Morgan Downgraded from Overweight to Neutral
Oil and Gas
PVA Penn Virginia Sun Trust Rbsn Hum Initiated at Buy $54
REITs
HTH Hilltop Holdings Morgan Keegan Initiated at Outperform
Retail Trade
DLTR Dollar Tree Friedman Billings Price Target Raised Mkt Perform $40 to $41
CWTR Coldwater Creek Brean Murray Downgraded from Buy to Hold
PSS Collective Brands KeyBanc Capital Mkts / McDonald Downgraded from Aggressive Buy to Hold
CWTR Coldwater Creek Roth Capital Cut Price Target Buy $25 to $19
CWTR Coldwater Creek CIBC Wrld Mkts Cut Price Target Sector Outperform $29 to $25
CWTR Coldwater Creek Nollenberger Capital Cut Price Target Buy $28 to $20
Savings & Loan
FHN First Horizon Punk, Ziegel & Co Upgraded from Sell to Mkt Perform $25 to $31
Semiconductors
ATE Advantest Jefferies & Co Upgraded from Underperform to Hold
IFX Infineon Bernstein Upgraded from Mkt Perform to Outperform
STM STMicroelectronics Bernstein Upgraded from Underperform to Mkt Perform
Telecommunications
MOT Motorola Lehman Brothers Upgraded from Equal-weight to Overweight
Transportation
CP Canadian Pacific RBC Capital Mkts Upgraded from Sector Perform to Outperform
Utilities
ATO Atmos Energy Wachovia Upgraded from Mkt Perform to Outperform
IDA IdaCorp Wachovia Upgraded from Underperform to Mkt Perform