Wang’s Happy Trading

Submitted by OptionDragon

Star Wars I : Darth Maul and Jedi Fight Scene by Our Andy Wang “Happy”

How high of caliber talent resides at Happytrading? Take a look at one of the best fight scenes in all of the Star Wars movies and know that Andy worked with George Lucas and is now our visual intellect expert with his technical analysis on the markets.
Andy worked hard on the visual effects of this fight scene and works just as hard on the technical analysis and trading for us.
Come join us, use this Force in compliment to your other services, network your collective as a matrix. The Force works strongly through this group and our collective intelligence is something to behold as we traverse the treacherous market, use this great resource as a super supplement to boost your intellect and help tap into the Yoda state, the zone.

Beware we are as humorous as we are deadly.

From Briefing.com

Some defense of RIMM and AAPL this morning.
Piper out with a positive note on RIMM saying cahnnel checks indicate strong demand across all four major US carriers but keeps its $112 price target.
BofA maintained their Buy on AAPL but lowering ther target to $160 from $180.
RBC using its proprietary data says that checks indicate strong Q2 Mac sales, inline iPod sales, iPhone shipments of around 2.3 million units. They do lower their price target from $200 to $175. Expect AAPL to beat its 10M iPhone goal in 2008.
RBC believes AAPL will ship 11M iPhones in 2008 due to smartphone market expansion, new versions, 3rd party applications, expanded global distribution, enterprise server integration, and unlocked phones.

BVN has resumed mining in 4 of its large mines after the end to its labor strike. Orcopampa, Uchucchacua, Antapite and Caraveli — resumed March 1, 2008 at midnight, after the conclusion of a 72 hour strike, which began on February 27, 2008.

According to the WSJ, more commercial real estate losses loom for banks and securities firms.
Firms with billions in commercial real estate exposure include Lehman Brothers (LEH), Citigroup (C), Merrill Lynch (MER), Morgan Stanley (MS), J.P. Morgan (JPM) and Bear Stearns (BSC). At the end of the fourth quarter, the combined commercial real estate exposure of those firm was $141B. The losses could last a very long time as analysts at Goldman Sachs Group see a decline of 21% to 26% in the next two years. Goldman’s William Tanona expects write-downs totalling $7.2B. “If we go into a deep recession, as implied by the various indices looking at the fixed-income market, the write-downs could be bigger in coming quarters,” says Richard Bove at Punk Ziegel & Co.
Short the IYR, I will be hawking the IYR for the next couple of months to the downside.

APOL downgraded to Sell by BofA.
CLF initiated with a Buy at DB.
MELI raised to Outperform at RBC Capital. MELI gapping up.
FXI gapping up.

BA lost the tanker deal and is causing more weakness in the Dow, it is gapping down this morning. Much of the tax money is going to a french company EADS (Airbus builder) instead of an American Icon. Bad for american taxpayers and bad for up to tens of thousands of jobs lost. Weird how we are spending our defense dollars to France who has been known to really despise our defense and global presence. Oh they were able to underbid BA’s contract but remember EADS is owned by the French governement and subsidized to undercut its rivals selling their planes at under cost most of the time.

According to Bloomberg “U.S. states and local governments may extend the worst slump in municipal bonds on record as they replace as much as $166 billion of auction-rate securities.”
The muni markets are getting into more trouble as each day passes. It is said that MER and C are abandoning the market.

WSJ reports further problems at CFC with defaults. The company’s annual filing with the SEC was released late on Friday, and it revealed a large increase in late payments on option adjustable-rate mortgages. According to Countrywide, more losses may be coming as borrowers can pay down lines of credit and take new funds later on. Its “maximum obligation cannot be defined.”

Warren Buffet said this morning in an interview on CNBC that the U.S. is essentially in a recession, even if the technical definition hasn’t yet been met.

According to Reuters:
“The depth of the crisis hasn’t been hit yet if a new study by several prominent economists is correct concluding that unless financial markets can quickly recapitalize, banks are likely to cut back their lending to consumers and businesses by nearly $1 trillion. That will slash economic growth by more than a percentage point over the next 12 months, said the study by David Greenlaw of Morgan Stanley, Jan Hatzius of Goldman Sachs, Anil Kashyap of the University of Chicago, and Hyun Song Shin of Princeton University.”

Remember that to find the highest probability plays one must analyze the fundamentals, technicals and sentiment (Vix, TRINs, TICKs, Acc/Dist.). Remember that sentiment is the only one of the three that can trump all. This is what is going on here in this market.

ISM is due out at 10am ET and that will move the markets. Keep an eye on gold and commodity prices. QID options are one of the best short or long vehicles.
PRU, XL, BYI, HUM, QID, markets good short candidates.
Vix, TLT, FXY, GLD, ^XAU good long candidates.

Stay nimble and let the market technicals show you which direction to swim to. Concentration and focus to tap into the zone. Don’t force anything and watch how the market reacts to the ISM number. Good Luck.