Wang’s Happy Trading

Submitted by OptionDragon

Bob Marley- Waiting In Vain

From Briefing.com

Biggest news this morning is that TMA cannot meet their margin calls and seems to going into bankruptcy. RBC Capital said now that one of TMA’s lenders has declared default, other agreements are automatically in default as well. The firm said as other lenders seize assets, TMA will have limited access to liquidity and limited means to resolve other capital or funding needs. The analyst expects the worst and sees little or no value will remain for shareholders. Target to $1 from $2. Shares are Underperform rated.
We talked about NLY late in the trading day yesterday and it seems the amount of put buying is now justified. NLY puts were recommended as a great short idea.

UBS could have another huge writedown. UBS AG came under renewed pressure on Thursday due to speculation it had sold a huge portfolio of risky mortgages at a deep discount and that the scale of its subprime losses was rapidly mounting.

FRE and FNM are hitting new lows.

The dollar fell to a new low against the euro as the European Central Bank and the Bank of England kept interest rates unchanged. The ECB is struggling with record inflation and the BOE is faced with sagging economic growth.

DVN- FBRC is advising clients to buy DVN ahead of the Barnett shale 3/28 update. In 2006 and 2007, the company experienced substantial growth and given the firm’s assessment of DVN’s Barnett associates, they believe the update could cause management to increase their upside potential. FBRC has reiterated their $115 target price and Outperform rating.

FMCN has earnings the 18th and some analysts are already talking FMCN up before their announcement. Sterne Agee expects FMCN to benefit from strong demand for advertising space in commercial, in-store, and residential locations. Target $75.

Fed Boston Bank Pres Rosengren speaks at 8am economic breakfast meeting on 3/6.
Fed St Louis Bank Pres Poole speaks on finance 8pm at University of Illinois 3/6.

BIDU upgrade- Sterne Agee views BIDU as more than just a search engine, as the company offers an integrated and creative package to advertisers with different needs. Additionally, the firm believes BIDU is well positioned to capture additional ad spend on paid search given its large demographic of young users.

JPM talks about the ABK deal. JP Morgan believes that $1.5B of new capital is likely not enough to fix the capital adequacy problem and that follow-on capital may be needed. They think shares may remain under pressure in the near term and maintain a Neutral rating.

MER is down this morning due to them amending terms to thier floating rate convertible securities. Merrill Lynch & Co., Inc. announced that it has amended the terms of its Exchange Liquid Yield Option(TM) Notes due 2032 to increase the conversion rate from 14.0915 to 16.5000, to add September 13, 2010 and March 13, 2014 as dates in addition to the existing dates on which holders may require Merrill Lynch to repurchase all or a portion of their LYONs and has extended adjustments for cash and other distributions to March 13, 2014. Merrill Lynch has also amended the terms of the LYONs to provide that Merrill Lynch may redeem these securities, in whole or in part, beginning on March 13, 2014 and to extend change of control protection until March 13, 2014.
On a side note, Wilson Feng, Merrill Lynch’s chairman of investment banking for China, has quit the firm after four years.

WMT showing strength this morning. On the heels of better than expected same store sales this morning, the stock has broken above $50. Wal-Mart’s same-store numbers moved up 2.6%, well above the .8% that was expected. Sam’s Club did a bit better than the Wal-Mart outlets. This could show additional strength.

GS upgrades MOS.

MS out with a strong note on AAPL saying it’s increasingly clear that Apple is focused on penetrating enterprise accounts with its Mac and iPhone products. If successful, they view this as a second halo effect that will boost revenue growth and margins beyond what is currently incorporated in consensus models. Firm sees the possibility of both software/security solutions as well as new customer wins at today’s iPhone announcement (scheduled for 10am PST at Apple’s headquarters), that will help validate the company’s enterprise strategy.

ACH upgrade to Neutral.
TS a strong outperformer recently got an upgrade.
MFA Mortgage (MFA) and Anworth (ANH) both getting downgraded.

Reuters writes that the service sector slump is pulling down the economy.
Reuters reports that Alan Greenspan said the credit market recovery depends on the housing market.
Reuters reports that Cleveland Federal Reserve President Sandra Pianalto said the the Fed must act to avoid a sharp downturn in the economy.
The Wall Street Journal writes that OPEC blamed surging oil prices on the weak U.S. dollar and “mismanagement” of the U.S. economy.
The Wall Street Journal reports that Yahoo! (YHOO) extended a deadline for nominating new board members, giving it more time to explore alternatives to Microsoft’s unsolicited bid.
The Wall Street Journal said that Exxon (XOM) will increase spending and expand exploration.
The FT reports that Defence Secretary Gates defended giving a tanker contract to a group including French company EADS.

Oil is spiking over $105 due to the falling dollar dropping to new lows also OPEC’s decision not to raise production and a surprising drawdown in crude inventories. “The primary factor causing the surge in oil prices is the surprising drawdown in crude inventories, which caused traders to really react quite dramatically,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.”

Long ideas USO, GLD, GOX, XAU, DBA, URBN, WMT
Short ideas- mortgage companies- NLY, ANH, MFA, financials- LEH, MER, GS, XLF, COF, brokers and banks, the ripple effect will be felt today because of TMA.

Tomorrow is the jobs report which is very big. This market action is already leaning to drop. I would be nimble and look for shorting opportunities over long unless market technicals dictate otherwise.

Good Luck and above all else keep positive, be patient but have conviction with your trades.