Wang’s Happy Trading

Submitted By OptionDragon

The Rainbow of Hope

From Briefing.com

CRDN is gapping down $10 on earnings results and poor guidance. CRDN lowers FY08 EPS guidance $4.55-$5.05 vs. consensus of $5.67. Lowers FY08 revenue guidance $715M-$836M vs. consensus of $831M.

HWAY gapping down hard this morning after lowering FY08 guidance. The company lowered its FY08 EPS view to $1.50-$1.55 from $1.77-$1.86, consensus is for EPS of $1.79. The company also lowered its FY08 revenue view to $720M-$740M from $782M-$815M, consensus is for revenue of $790.74M.

CSCO upgrade by Bernstein. New chip will help company gain share, maintain Outperform.
After the company announced a new network processor, Bernstein thinks the new chip will create new barriers for entry and help the company sell its existing products more effectively
Great technicals but Nasdaq has been out of favor.

There is some support for the MBI news yesterday by FBR increasing their target to $16 after the S&P ratings affirmation.

GOOG is gapping down $11 after 5 downgrades this morning mostly on weak comScore data in January. Here they are:
Stanford: believes that several data points, including a comScore report on search volume and lower e-commerce growth, indicate that consumers are searching the Internet less than expected. The firm maintained their Hold rating on Google, as they believe that the slowing economy could stunt Google’s growth.
BEST: GOOG’s January click through rate was the lowest since the data was first reported and was down 200bps from Q4 levels. The firm said the data may not be accurate but notes the lower clicks by consumer could be due to the economic slowdown. The analyst continues to view shares as attractively valued. Shares are Outperform rated.
UBS: January comScore US paid search data indicates sponsored clicks were flat for the year and down 12% QoQ. However, search volumes were up 39% YoY, indicating that GOOG is actively managing these metrics, the dataset is incorrect, or advertisers are buying fewer keywords. Shares are Buy rated, target lowered to $590 from $650.
Piper: notes that comScore data showed GOOG’s paid clicks were down 7% q/q. They believe the weakness is in part caused by the macroeconomic slowdown and do not believe this is an indication that the broader search market is slowing. Shares remain Buy rated
Jefferies: believes third-party data suggests continued deceleration in paid click growth on Google properties, suggesting Street estimates may not to come down. They point out that the January comScore report shows a Y/Y decline of 0.3% in paid clicks on Google properties, down 7% M/M sequentially from December 2007. Jefferies maintains a Hold rating on GOOG shares.
Again more support for the consumer and economic slowdown. We will probably see additional pressure on shares and on the 4 Horsemen and Nasdaq today. The good news is that this bad news is being priced in right now and GOOG is ran by some of the smartest managers in the world and should be able to pull things around, this weakness is from the macroeconomic environment not from mismanagement so once the macro environment changes the shares will regain their strength.

AZO should be a volatile mover this morning as earnings came in good on the bottom line but soft on the top also confirming a slower consumer but that the company is well run. AutoZone-AZO reports Q2 EPS $1.67 vs. consensus of $1.62
Reports Q2 revenue $1.34B vs. consensus of $1.35B and SSS down .3%.
I expect this to be a good gap trade.

FWLT is a big gapper this morning, unfortunately it is down. It is down $6 at 8% as I write this. FWLT missed the bottom line but beat the top. FWLT reports Q4 EPS of 56c vs. consensus of 76c. Reports Q4 revenue $1.47B vs. consensus of $1.42B. I expect continued weakness but stabiliztion due to the expected upcoming downgrades on the issue.

TGT beat on the bottom line but missed on the top. TGT reports Q4 EPS $1.23 vs. consensus of $1.22. Reports Q43 revenue $19.87B vs. consensus of $20B. TGT CEO says pace of sales and earnings slowed ‘considerably’ in 2H of year. This just reaffirms the slowing economy and consumer spending thesis.

Consumer Confidence is coming out at 10am ET which will move the markets, expected is 82.5.
Keep a lookout for that esp with consumer spending at a focus.

PPI was slightly hotter than expected at 0.4% which is slightly above the .3% expected.
For the year it is up 7.4% which is the highest sine Oct 1981. Core is up YoY at 2.3%. This is above the Fed comfort level between 1-2% YoY.

Art Cashin from UBS on CNBC, a great trader on the floor said this morning that he thinks this market range boundness will still hold.
Ben Bernake is also speaking tomorrow so the market will probably be light in volume today and could move volatile tomorrow if he says something unexpected.

I will keep nimble on my feet today like Bruce Lee and look for opportunities as they develop. Alot of cross currents today with the speech tomorrow and consumer confidence today with PPI influence so stay light on your feet unless you see something real good.

Good Luck and to a Prosperous Day to You.